Posts Tagged 'UK'

UK’s Top Boardrooms Look Set To Hit 25% Women Target

by Dina Medland for Forbes

Women now make up 23.5% of non-executive director positions on the boards of Britain’s top FTSE 100 listed companies. Just 17 more female appointments to these boards are needed to reach the 25% female target by end-2015 set by Lord Davies of Abersoch four years ago in his review for the UK government on the under-representation of women on boards.

“The rate of change that we have seen in FTSE 100 companies over the last four years has been remarkable. The voluntary approach is working, boards are getting fixed” Lord Davies will say at the launch of his report in London today.

“FTSE 100 boards have made enormous progress in the last four years, almost doubling female representation to just shy of 25 per cent.  We must celebrate this outstanding achievement and the change in culture that is taking hold at the heart of British business. The evidence is irrefutable: boards with a healthy female representation outperform their male-dominated rivals” Vince Cable, the UK Business Secretary who commissioned the Davies Review, will say today.

The authors of the Female FTSE Board Report 2015 who include Professor Susan Vinnicombe CBE, Dr Ruth Sealy and Dr Elena Doldor of Cranfield University’s School of Management –  say that if the appointment rate of one woman to every two men appointed is sustained over the coming months, the 25% target should indeed be met before the end of this year.

Britain’s broken corporate governance regime

by Jeroen Veldman and Hugh Willmott for The Conversation

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.

Investor power

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.

‘Corporate Governance Is The Very Essence Of A Business’: Stephen Green

By Dina Medland for Forbes

It can take at least 24 hours for the enormity of a corporate governance scandal to be fully comprehended. But it should never take eight to ten years for it to be revealed.

The UK’s corporate governance code balances on the workability of ‘comply or explain.’ It sets standards for corporate behaviour, and seeks to encourage best practice, exhorting business to ‘tone from the top’, via its boardrooms. But what happens when boardrooms shroud themselves in complexity and when it comes to the moment of reckoning, the inhabitants have moved up and out?

Evidence that the Swiss private bank of HSBC, the world’s second largest bank, helped clients conceal undeclared accounts and provided services to criminals and corrupt businessmen is still reverberating around the world. On Twitter TWTR -1.82% you can take your pick from #HSBCLeaks, #SwissLeaks or #HSBCFiles.

Those files were obtained through an international collaboration of news outlets, including The Guardian, the French daily Le Monde, BBC’s Panorama program and the Washington-based International Consortium of Investigative Journalists. This was not the result of a regulator at work, but an uncovering  precipitated by a whistleblower, Herve Falciani. Read more here.

UK Watchdog To Focus On Company Culture And Behaviour

by Dina Medland for Forbes

When company culture and behaviour rise to the top of the agenda for scrutiny by the watchdogs of corporate governance is it time for a celebration? One could be forgiven for thinking we might be getting somewhere in the struggle to align regulation with ‘best practice’ for business, rather than mere ‘box-ticking’ for compliance.

In the UK, the annual review of developments in corporate governance and stewardship for 2014 by the Financial Reporting Council (FRC), is just out. It has a strong focus on the importance of good culture within organisations.

“The governance of individual companies depends crucially on the culture that is in place. The UK’s strong governance culture encourages companies to list in London and provides assurance to investors. Unfortunately, we still see examples of governance failings in this area. Boards have responsibility for shaping the culture, both within the boardroom and across the organisation as a whole. This requires constant vigilance” says Sir Win Bischoff, FRC Chairman. Read more here.

Why it’s time boards faced up to the corporate culture challenge

by Sir Win Bischoff for City A.M.

CULTURE in UK business came under the spotlight in 2014, as executive remuneration, market manipulation, supplier arrangements and so on drew comment and criticism. Where does the responsibility lie for ensuring ethical corporate behaviour, and who is accountable when culture is found to be at fault?

The Financial Reporting Council’s (FRC) 2014 revision of the UK Corporate Governance Code requires the board to set the appropriate “tone from the top”. This means establishing the “culture” – the values and principles that direct how the company behaves – and ensuring that this culture is followed throughout. During 2015, the FRC will work with a wide range of stakeholders to gather practical insight into this area.

Culture is not an easy concept. It’s the sum of knowledge, beliefs, values and experiences acquired by a group of people over a period of time through living or working together. Relating that to a corporate setting, where every company is different and cultures might need to be established or changed within a specific timetable, brings added complexity. This is one reason why the UK corporate governance framework offers important flexibility in terms of developing sound company culture. Read more here.

Long-serving non-executives are on the wane in the UK

by Alison Smith for The Financial Times

The UK’s biggest public companies are increasingly ready to say goodbye to long-serving directors.

The number of non-execs who have been in the post for more than nine years at FTSE 100 groups has dropped by more than a quarter since February. Analysis by the Financial Times shows that the total is 73, against the 97 identified in a report by Cranfield School of Management earlier this year.

Nine years as a non-executive is a critical period in corporate governance terms, since after that point the UK code says non-execs can no longer be assumed to be independent of the company. Read more here.

 

What does good corporate governance look like?

by Jo Iwasaki for ICAEW

We all know the importance of corporate culture and behaviour in corporate governance. The revised Preface of the 2014 version of the UK Corporate Governance Code talks about the key role that the board plays in establishing culture, values and ethics of the company.

The challenge is that it is very difficult to say, not just in the Code but generally, how these can be achieved. The processes and structures that the Code requires would be only partially effective if the right mind set does not back them up. Read more here.


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