By Dina Medland in London
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.
The Bank of England has just appointed Charlotte Hogg as Deputy Governor - its second most powerful executive. She retains her existing role as the central bank’s Chief Operating Officer (COO). This is a rare good story on diversity at the top of organisations that matter.
Ms Hogg is just 46 years old. She was hired from the banking group Santander by governor Mark Carney to shake up the organisation, which he said needed to be more transparent and better communicate its policies. Mr Carney made a speech about diversity and inclusion on the same day as the appointment, which is available here.
Women on Boards
But the rate at which women are being promoted to the boards of the UK’s largest companies has slowed for the first time, according to findings from executive search firm Egon Zehnder. It said last week that women made up 29% of hires to UK boards last year, down from 32.1% in 2014 and 31.6 % in 2012.
This means Britain lags behind western Europe where women were 35.4% of hires to boards, and France, where the figure was more than 57%.
Failure on issues of cybersecurity do make the headlines at the moment – but without consequences, it seems, for the individuals at the top: witness TalkTalk, and CEO Dido Harding. But for how long?
New regulations coming from the EU will require companies to declare a data breach within 72 hours. But, according to The Register, Sports Direct – already embattled on many governance fronts - left its 30,000-strong workforce in the dark over a data breach in the autumn when a hacker accessed internal systems containing staffers' personal information.
Ethics in business
As profits fall, L'Oréal confirmed it is considering selling The Body Shop brand. It said it was exploring all options but had not yet made any decision on the future of the Sussex-based ‘ethical’ retailer.
Is it a sign of the times?
L’Oréal reported that The Body Shop’s operating profit had dived 38% to €33.8m in the year to 31 December 2016. Sales sank nearly 5% to €920.8m. The pace of decline stepped up in the final and most important quarter of the year – sliding by 6.3% in total.