There are so many good corporate governance reasons to read this story with interest.
The Bank of England has created a new role of ‘conflicts officer’ in the wake of the events resulting in the resignation of its Deputy Governor, Charlotte Hogg. I covered that story at the time here, on Forbes.
It has been an eventful fortnight in UK financial regulation, spewing food for thought on a whole spate of issues around accountability and trust, and their role in better corporate governance.
Almost exactly nine months ago Andrew Bailey, CEO of the UK regulator the Financial Conduct Authority (FCA), spoke out for the first time in the media via an opinion piece in The Guardian to firms that were not applying the senior managers regime that had been in place since March 2016.
One might think that gender diversity could be the easiest component to achieve of any bid to get true cognitive diversity around a boardroom table. But, despite a great deal of effort in the last six years from the U.K. government, CBI support, and cheerleading from a plethora of independent bodies - all well supported by coverage from the mainstream British business media - one sad fact remains true: progress on gender diversity in U.K. boardrooms seems to stall whenever it thinks nobody is watching.
This is not the place to dwell on ‘why is that, exactly?’ But it is a good place to ask what it is that needs to change.
What on earth, you might well ask, is a ‘reputational deficit’? You would have to ask Uber board member Bill Gurley, who used the term to describe the state of “what is still Silicon Valley’s most successful start-up” as described by the Financial Times. He told the paper: “It is going to take us a while to get out of this” when referring to the mess the company finds itself in after revelations of endemic sexism and a fair amount of hubris within its managerial ranks.
UK plc boardrooms have displayed a tendency to treat the issue of cyber security a bit like a bad smell – ignore it and hope that it goes away quickly. But the unprecedented worldwide cyberattack last weekend that spanned 150 nations and infected over 200,000 computers has quickly made ‘ransomware’ an everyday word, and highlighted the need for cyber security to be at the top of every boardroom’s agenda.
The rise of the so-called ‘gig economy’ has focused fresh attention on worker’s rights in Britain at a time when corporate governance reform is on the agenda. Since the last Governance Watch, there have been many stories in the media headlines focusing on employees at a variety of businesses from the point of view of how they are treated on worker’s rights. At time of writing the latest media coverage is of the delivery company Hermes.
You may have seen a story in the Financial Times this week around JPMorgan and accusations of fraud. But if you were to do a Google search for ‘JPMorgan accused of fraud’ as a partly-remembered-headline-seen-in-passing in order to find it again, you would get a long list of stories containing both the bank’s name and allegations of fraud involving single individuals or ex-employees, going all the way back to 2004.
There has been no shortage of headlines screaming of shareholder and stakeholder concern around levels of executive pay at publicly listed businesses. This concern has also been reflected in the UK Government’s consultation on corporate governance reform, and the report from the Parliamentary Select Committee, just out.
It certainly made the headlines in the Derby Telegraph as well as in Britain’s national newspapers. Employees at FTSE 100 engineering giant Rolls-Royce plc are to be given a chance to grill bosses about the company's recent performance. For the first time the firm, which has its civil aerospace and nuclear divisions in Derby, is set to hold an Annual General Meeting for its workers, which is likely to take place at Derby County's Pride Park Stadium in May, the paper reported.
Bovis Homes – one of the biggest housebuilders in Britain - is to pay out £7m to repair poorly built new homes sold to customers. The compensation comes after angry customers took to social media and accused the business of pressuring them to move into incomplete houses so it could hit its sales targets.
Corporate Governance has been called ‘the very essence of a business.’ It can hit the media headlines in multiple ways – but few of them are likely to be beneficial to the business in question. Because by the time it has made the headlines, the odds are that corporate governance has failed at some level.
In Governance Watch we regularly bring you some of those recent headlines around governance, in order to raise an early flag for their wider implications for each listed business.
