by Dina Medland in London
All UK plc boardrooms should be watching carefully. Pensions keep coming up in the headlines and the stories rarely reflect well on the businesses concerned. They are increasingly being viewed as a corporate governance issue, and from there it is a small leap to reputation.
The business media has tended to split its coverage in the past, so a story about a company and dividends was just that, with an implication of happy shareholders. The same story might not also have looked at gaping pension deficits and their ramifications, including the payment of those dividends. Now, as civil society turns up the scrutiny, pensions are getting a lot more attention.
This Financial Times story back in May, was based on a report by the think-tank the Resolution Foundation: ‘UK companies pay staff less as they plug pension deficits, says study’.
This month an FT story covering the United States reads ‘More companies sell bonds to fund pension obligations’. They are doing it because it is tax-deductible, and because companies face “a higher penalty on their unfunded pension plans from the Pension Benefit Guaranty Corporation”.
Back to the UK, where the ghost of BHS re-emerged in August. It seems that Dominic Chappell, its former owner, is to be prosecuted by the pensions watchdog for failing to provide information for an investigation into its sale. A story in The Guardian tells us that the Pensions Regulator is prosecuting Mr Chappell for failing to comply with three notices for information issued under section 72 of the Pensions Act 2004. The regulator “is understood to be seeking as much as £17m from Chappell and Retail Acquisitions in relation to the scheme.”
Whether or not the Pensions Regulator intends to get much tougher in the future remains to be seen. But there is a definite shift in media coverage of pensions, whereas in the past they have remained out of the mainstream media spotlight, relegated to ‘specialist’ coverage and viewed as a niche area. A changing world of work and competition, uncertainty and Brexit suggest they are not going to escape that spotlight in the future.
One issue that should never have stepped out of the spotlight for boardrooms in the last decade is cybersecurity. Whether it is because the occupants of most UK plc boardrooms are white, male, and over 55 (not what you would call a diverse bunch, particularly on ethnicity, the subject of my final post on Forbes) or for multiple other reasons - information on cybersecurity risk continues to elude boards of directors at our largest quoted companies.
Just 31% of the 105 FTSE 350 boards that responded to a UK government survey said they received “comprehensive, generally informative” reports about cybercrime. More than two-thirds of boards have not been trained in how to respond to an attack. The ICAEW’s Economia was among those covering the story.
I covered cybersecurity and UK boardrooms extensively on Forbes since 2013 and little appears to have changed in terms of the lack of preparedness. Being afraid to ask if you do not already know seems very dangerous in a fast-changing world, particularly at boardroom level.
The Department of Culture, Media and Sport is currently running a survey to gather data on the UK’s cybersecurity industry. Companies which offer cyber security products, services and solutions, whether as their sole business offer or as a proportion of their business activity, are encouraged to complete it. It closes on August 31, 2017.