Just six days after Britain unveiled its improved flagship set of guidelines for good corporate governance there was a Tesco-shaped party pooper lurking around the corner.
The supermarket giant admitted to accounting flaws that wiped hundreds of millions off its stock price, graphically demonstrating that the flawed accounting and audit culture that provided the basis for the Cadbury Report in 1992 is still very much present.
It also shows that the claim to continuous “improvements” underlying the UK Code of Corporate Governance has, over the past 23 years, amounted to little more than a minor face-lift and offers no greater protection for shareholders, employees, suppliers and others exposed to such scandals.
Of course, the UK is not alone in worrying about this. Major US investment house Vanguard has put its $3 trillion in assets behind a call for changes in corporate governance which adds to the pressures to revisit and reform relations between directors and stakeholders. The firm’s CEO, Bill McNabb is reported as saying: “What you hope it leads to is not a lot of short-termism but discussion about important long-term issues.” Read more here.