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Follow dinamedland on Twitter       A blog around the issues facing the boardroom...in the UK and around the world. I aim to reflect a wide-ranging set of views and kindle ongoing and much-needed debate. The aim is for more 'board talk' and less 'bored talk'.  

July 28, 2013

"Thought provoking, insightful and challenging – Board Talk is now the ‘go-to’ commentary on boardroom issues'

Vanda Murray, OBE  (and non-executive director, now Chairman Fenner plc - 2017)

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A 'Knock-Out' Year For Investors In U.K. plc

Posted on July 17, 2017 at 12:45 PM

UK plc has had such a strong quarter when it comes to dividend payments that Capita Asset Services has upgraded its 2017 forecast for headline dividends to a record £90.6bn, up 7.0% year-on-year.

UK dividends hit an all-time record of £33.3bn in the second quarter of 2017, according to the latest Dividend Monitor from Capita Asset Services which provides infrastructure, services and expertise to clients across the capital markets. The 14.5% increase was the fastest in over three years, it said.This is apparently "thanks to robust underlying growth and high special dividends." Also those large forex gains due to the weakness of the pound.

UK Dividends - Capita Asset Services London July 17, 2017

Special payouts of £4.6bn were the second-highest on record for any quarter, owing mainly to a £3.2bn payment from National Grid on the sale of its 61% stake in its UK gas distribution business. "More cash will find its way to National Grid’s shareholders by way of a share buy-back" said Capita.

Meanwhile, Lloyds Bank, now enjoying surging profits, paid £357m as a special, on top of a £1.2bn regular dividend. 20 companies in total paid specials, the second-highest number in any quarter on record.

Underlying dividends (which exclude specials) reached £28.6bn, also a comfortable record, increasing 12.6% year-on-year. A little under five percentage points of this increase came from the effect of the weaker pound translating dollar and euro dividends at a more favourable exchange rate; one-third of the total distributed in the second quarter was declared in US dollars, with euros accounting for a small fraction more. That effect added up to £1.2bn in the second quarter.

"On a constant-currency basis, underlying growth was nevertheless an impressive 7.8%, the fastest increase in two years" said Capita Asset Services.

The sector breakdown is interesting - just look at domestic utilities and building materials and construction, with the highest percentage change year on year. Mining comes third - every company raised dividend payouts. "Glencore and Rio Tinto made an especially large contribution to growth" said Capita.

Source: Capita Asset Services, London July 17, 2017

“The gloves came off in the second quarter, as UK plc limbered up to deliver a knockout year in dividends. Shareholders can be thankful they had punchy special dividends and the weak pound in their corner, but improving profits have also played their part. Exchange rate gains have come not only for big multinationals declaring dividends in foreign currencies, but also for others with overseas operations, or export sales, supercharging their profits and so their dividends." said Justin Cooper, Chief Executive of Shareholder solutions, part of Capita Asset Services.

"Even though the second half is going to be much quieter, investors can look forward to dividends hitting a new record this year" he added.

“Most of the excitement for 2017 is now behind us. As we move towards 2018, the extent to which the weakening UK economy continues to diverge from improving trends elsewhere in the world will determine which companies are still able to deliver strong dividend growth. The uncertainty over the economy, the Brexit negotiations, and the unstable political situation are key factors to watch” said Mr Cooper.

Indeed. Which is why I have put that comment in bold. Also, what dividend payments as well as the lack of them across sectors tell us is a complicated picture. Look at the barely positive as well as at the negative figures in the chart above by sector.

Is There 'Post-Brexit ' Corporate Governance Now ?

Posted on July 13, 2017 at 6:20 PM

Brexit has changed everything, and it hasn't even happened yet.

But what does it hold in store for a dedication to the pursuit of best corporate governance, particularly with a Prime Minister who started out by claiming a great commitment on that front even before she took office ? (The link is to my coverage at the time on Forbes).

Today on Forbes I covered the announcement by the UK financial watchdog, the Financial Conduct Authority (FCA) about proposed changes regarding premium listings, with clear implications for Saudi Aramco as it looks to make a decision for its IPO late next year.

A more concise explanation in truth of the changes and how they would work to attract the world's biggest flotation is here, by Ian King of Sky News, who also mentions some City reaction. And I have some reaction to add.

The first unsolicited and immediate reaction in my inbox came from Ashurst, the international law firm.

Commenting on the FCA's consultation on proposals to create a new premium listing category for sovereign-controlled companies, Nicholas Holmes, equity capital markets partner at law firm Ashurst, said:

"The declared basis of the proposed dilution of the regime (that applies to shareholder controlled companies when they seek a premium listing) is the claim that sovereign owners have different motivations from private sector individuals or companies. This may be true, but it is not necessarily the case that these motivations are any less in need of proper control and scrutiny. The risk is a dilution of the premium listing brand."

Hard on its heels was Royal London Asset Management (RLAM) which manages £104.5bn of assets, including over £20bn in UK listed equities.

“It looks like the FCA is consulting on amending the existing listing rules to accommodate the peculiarities of one company, which is not a very effective strategy for regulating the market as a whole. If the proposals in this consultation document are implemented, it will be bad news for London and will reverse the progress we have made in recent years to uphold strong governance and protect minority shareholders.

In our view, the listing rules should apply for any premium listing, regardless of whether the controlling investor is a private individual, a consortium or a sovereign state” said Ashley Hamilton Claxton, Corporate Governance Manager at RLAM.

And this, from ShareAction, the activist group promoting responsible investment:

“We will be taking the opportunity to provide feedback on the UKLA’s new proposal for listing of state owned entities. Our initial reaction is that investors and savers should be nervous about any dilution of existing protections which were specifically introduced to avoid a repetition of the governance issues associated with BUMI and ENRC. We will also be pushing the major index providers to carefully consider how to respond to this proposal. The FTSE 100 includes a range of multinational businesses who meet high governance standards – there is no reason why this should be diluted by technical changes in the premium listing with potential implications for passive investors. As a financial centre, London must be careful not to have unintended consequences and damage its own reputation for high governance standards”.

And from Chris Hodge, an independent governance consultant now but previously with the Financial Reporting Council. Please note he was getting on a plane when communicating with me briefly and had not read the original material but had read my piece and the FCA press release.

"The argument from the FCA really amounts to 'this is a special case.' And maybe it is. But if we find that the London Stock Exchange is no longer attracting overseas issues for primary listings because of Brexit, will this turn out to be the first of a steady series of 'special cases' ?" said Mr Hodge.

The cumulative effect of that, he suggested,could be to take us closer to the current UK Chancellor of the Exchequer, Philip Hammond's 'low-cost, low-regulation if we have to' vision for the London market.

Food for thought ?

Ah, yes. Perhaps soon 'Brexit' will have 'unintended consequences' as a tautological twin phrase in the dictionary.

Channeling The Tensions Of Conflict For Better Board Dynamics

Posted on July 6, 2017 at 6:45 PM

It isn't just corporate culture that is under renewed scrutiny in the U.K. in the interests of corporate governance and better business practices. Boardrooms hold an important key to that culture, and are themselves a reflection of it in the way in which they function.

A study on conflict and tension in the boardroom has just been released by ICSA: The Governance Institute and Henley Business School to demonstrate how they can be managed to produce better board dynamics. It starts from the premise that disparate opinions can lead to disagreement, which is often uncomfortable - but when properly handled can lead to healthy debate and result in better conclusions. The tension arising from disagreement is "a positive and  necessary force for any effective board."

Andrew and Nada Kakabadse are both professors in governance and leadership, now at Henley Business School. I have covered their work for years - going back to 2013 in the Financial Times when Andrew Kakabadse, then at Cranfield University's School of Management, spoke out on non-executive directors as being "of little or no value to the business." This new research was discussed at today's #ICSAConf on corporate governance in London, building on some damning previous findings.

Professor Andrew Kakabadse speaking at Simmons & Simmons London July 5, 2017

“Challenge, scrutiny and robust debate in boardrooms are part of the effective oversight of management and the decision-making process, but can tip into confrontation. Tension and conflict are not only inevitable, but play an essential part in effective boards. It is only by understanding and embracing this process, that the best possible decisions can be reached,” said Simon Osborne, Chief Executive of ICSA: The Governance Institute.

Professor Kakabadse told #ICSACONF16 that in his experience most organisations ignore conflict, and boardrooms find truth hard to face.

The report sees conflict as tension that has escalated to extreme and unresolvable levels. At this point tension can be disruptive and detrimental, changing the nature of board relationships to an extent from which it is hard to recover, it argues.

Tension and conflict are also most likely to emerge during decision making and in particular around organisational purpose and direction.

Therefore for a board to work in the best interests of the organisation the source of conflict and tensions, ie the personal differences and opinions in the boardroom, need to be managed effectively. That is a role that falls to both the Chairman and the Company Secretary. Together they can ensure what the report calls 'managed tension', which delivers best results.

"Robust debate, diverse membership, open dialogue and tackling uncomfortable issues head-on are shown to benefit boards, particularly in decision-making and strategy development" says the report.

When things become personal, it adds, the conversation is best taken outside the boardroom. Informal discussions between board members is seen as a better way for some conflict resolution.

“The chairman, company secretary and senior independent director are perceived as playing the most important roles in managing tension and conflict resolution. Company secretaries in particular play a critical role in conflict resolution, facilitating and maintaining boards’ ability to function,” concludes Professor Andrew Kakabade. (my emphasis).

The critical role of the Company Secretary to 'managed tension' in the boardroom : Professor Andrew Kakabadse Henley Business School speaking at Simmons & Simmons London July 5, 2017

The findings of this research are based on 35 face-to-face interviews with 11 chairmen, 10 CEOs, 7 Company Secretaries, 3 Chief Financial Officers, 3 Non-Executive Directors and 1 General Counsel, said ICSA.

Professor Andrew Kakabadse at  #ICSACONF   July 5, 2017   London

You can download the report here.

On a light Thursday evening note - as far as I am aware, there was no discussion on the use of alcohol to help manage tensions at management meetings, a la Sports Direct.

But as ICSA CEO Simon Osborne (@sosborne4) recently commented on Twitter in response to a cartoon last Sunday:

Raising The Global Bar On ESG Issues With Stock Indexes

Posted on July 4, 2017 at 2:05 PM

Is the world's largest pension fund leading the way on how to get change on a number of fronts, from gender diversity to sustainability ?

Judging by the recent decisions made by the Government Pension Investment Fund (GPIF) of Japan, it might well be - given its adoption of some core environmental. social and governance (ESG) benchmarks.

As reported here on Board Talk, GPIF - which has over $1.3 trillion in assets, just selected a new index provided by the London Stock Exchange Group's FTSE Russell as a core ESG benchmark.  MSCI has also announced the launch of two new ESG indexes - the MSCI Japan Empowering Women Index (WIN) and the MSCI Japan ESG Select Leaders Index and both have been selected as benchmarks for GPIF's investment strategy.

Institutional investors have become increasingly loud about the need for businesses to champion diversity - see this recent post on Board Talk on Hermes Investment Management and Rio Tinto plc  and much of my writing on Forbes about investors.

Recent research has suggested that greater participation of women in the workforce may have benefits for the Japanese economy. As a result, the Japanese government has set out explicit goals to encourage women’s participation and promotion in the business world. It has set a loose target of “30% female leadership representation in various fields of Japanese society” by the time Tokyo hosts the Olympics in 2020.

The MSCI Japan Empowering Women Index (WIN) is made up of companies whose gender diversity initiatives have been determined by MSCI ESG Research to encourage more women to enter or return to the workforce.

"By allowing investors to express their preference for companies with greater levels of gender diversity in their sector, this index provides an opportunity for investors to participate the progress to women empowerment and its economic value and we need to ensure that we promote that message throughout our marketing" said MSCI.

The index's methodology uses local data points from Japanese companies as well as global data points and MSCI ESG research. This, said MSCI, "offers further incentive to local companies to move towards global ‘norms’ and improve gender diversity in the work place."

The second index, the MSCI Japan ESG Select Leaders Index, targets companies with the best ESG profile relative to their sector peers. This index is designed using MSCI ESG Ratings and targets companies with the highest ESG quality from within its parent index, the MSCI Japan IMI Top 500 Index, offering institutional investors a method to integrate ESG into their investment process.

All these initiatives point to the need to raise the global bar on the issues of stakeholder concern for better run businesses.

GPIF adopted Japan's stewardship code for institutional investors in 2014. It may be leading the way here with its new focus on ESG stocks.

New ESG Index Chosen By World's Largest Pension Fund

Posted on July 3, 2017 at 12:15 PM

The Government Pension Investment Fund (GPIF) of Japan, the world's largest pension fund with over $1.3 trillion in assets. has selected a new index provided by FTSE Russell, the global index provider, as a core ESG benchmark.

The new FTSE Blossom Japan Index is constructed using FTSE Russell’s ESG Ratings data model, which draws on existing international ESG standards, including the UN Sustainable Development Goals. Its inclusion thresholds are aligned with the globally established FTSE4Good Index Series.

The index can be used to assist in the integration of ESG considerations into a diversified strategy. It does not deviate significantly from the index characteristics of its traditional market capitalization weighted benchmark, said FTSE Russell.

"To minimise industry bias, the index has been designed using an industry-neutral weighting approach to match the industry weights in the underlying FTSE Japan Index" it said.

FTSE Russell says it is responding to "a growing trend among asset owners to integrate ESG considerations into passive investments."

“We are delighted to be working with GPIF to promote strong stewardship practices and market standards. FTSE Russell’s ESG capabilities are increasingly being used by asset owners and pension funds around the world" said Mark Makepeace, Chief Executive, FTSE Russell.

Japan and its institutions are actively engaging with companies on their ESG practices, he added, saying the FTSE Blossom Japan Index "provides a powerful basis to increase corporate ESG transparency and performance."

The London Stock Exchange Group launched the FTSE Russell brand in May 2015 and has since actively supported the growing global green and sustainable financing movement.

Just 5% Of European Pension Schemes Consider Climate Risk In Investment

Posted on June 27, 2017 at 6:55 AM

Startling figures? Just 5% of 1,241 European Pensions schemes have considered the investment risk posed by climate change. T

A report by Mercer, the consultancy gathers information from 1,241 institutional investors across 13 countries, reflecting total assets of around €1.1 trillion. As well as investment strategy information, it tracks the drivers behind Environmental, Social and Corporate Governance (ESG) integration and two key areas within responsible investment: investor stewardship and active ownership rights and, secondly, the investment risks and opportunities posed by climate change.

According to last year's European Asset Allication Report, 4% of respondents had considered the investment risks posed by climate change. The rise in consideration in a critical year in climate change awareness is so minimal it's tragic.

“The report findings highlight the need for the industry as a whole to do more; it’s ironic that the pace of response to this enormous issue is best described as glacial, outside a small group of leading funds. The Paris Agreement, which came into force in November 2016, has set an ambitious target to keep global warming well below 2˚C above pre-industrial levels, with a stretch target of 1.5˚C. It provided a strong signal as to the long-term direction of climate related policy; investors must therefore consider the potential financial impacts of climate change on their portfolios. Inactivity by pension schemes brings risks from stranded assets and physical climate risks, as well as reputational concerns. A proactive approach can open up investment opportunities in the green fields of the low carbon economy” said Phil Edwards, Mercer’s Global Director of Strategic Research.

Mercer’s report finds that there has been a gradual increase in the number of European pension schemes factoring ESG issues into their investment process. Financial materiality is the main driver behind this trend, cited by 28% of respondents in 2017 compared to 20% in 2016, it says. This is followed by reputational risk, cited by 20% in 2017 compared to 16% in 2016. The report also finds that around 20% of asset owners integrate ESG risks into their investment beliefs and policy with 22% of those surveyed having a standalone responsible investment (RI) policy.

The report asked participants how they act as active owners (exercising voting rights in pursuit of good corporate governance) to meet their stewardship obligations. Some 28% of asset owners consider ESG and stewardship as part of the manager selection and monitoring process, up  from 22% in 2016. Furthermore, 29% of asset owners request that their advisor monitors stewardship issues on their behalf, up from 20% from 2016. There has also been an increase in expectations for disclosure, with 9% of asset owners reporting on their stewardship activities publicly (up from 6% last year).

“The increase in asset owners citing financial materiality as the driver behind considering ESG risks is a positive development for the market - asset owners simply cannot afford to dismiss ESG risks as non-financial. Regulators are increasingly clear that asset owners should be considering all risks that may be financially material, including ESG related risks and longer-term risks such as climate change – proactive consideration of these issues is absolutely consistent with fiduciary duty" said Kate Brett, senior RI specialist.

In early June the Institute and Faculty of Actuaries (IFoA) published the second edition of Delta, its new thought leadership platform - and I had a piece in it - as ever, most easily accessible via Twitter.

Delta, Edition 2 IFOA copyright

So it is time to put the message in capital letters. Over to the Financial Stability Board.

Its Task Force on Climate Related Financial Disclosures (FSB TCFD) was covered by my on Forbes at its launch, and mentioned in a piece in March on responsible investment.

The FSB will release the final version of its Recommendations of the Task Force on Climate-related Financial Disclosures report on Thursday, June 29th - and I will be covering it. Its recommendations are intended to provide companies with a framework to consistently disclose climate-related risks and opportunities in their annual financial filings.

As such, it should help drive further focus on climate risk management by asset owners.

Businesses Need To Aim To Be 'Inclusive By Instinct'

Posted on June 26, 2017 at 12:40 PM

A worrying report landed recently - some 39% of workers surveyed in the U.K. admit that they have experienced a form of bias in the workplace or when applying for a job.

Findings from research done by Badenoch & Clark, which is part of The Adecco Group UK and Ireland, are more than a little disturbing. On the one hand, they found that one in five (20%) of employees have taken action to hide their age, disability, social background or sexuality in the workplace or when applying for a job. Some 22% think that their company does not embrace diversity and inclusion at any level, 29% have never read their company’s diversity and inclusion policy and a worrying 11% said that their company does not even have one.

But their research also throws out some surprisingly positive views about inclusion in the workplace. Almost half think that their organisation embraces diversity and inclusion at a board level (46%) and at management level (43%). 86% also agree that their organisation employs a broad range of people from all social backgrounds.

Which leads me to wonder a bit about how much people are prepared to say in research like this....which will always reflect the views of a savvy majority.

It's good to see they are not taken in either.

“Whilst it’s great to see that employees are, in some cases, positive about the level of diversity and inclusivity in UK organisations, there is still a long way to go. Each worker that has experienced bias is one too many, and employees will only ever flourish if they feel they can truly be themselves at work. Businesses need to commit to living and breathing diversity and inclusion throughout the entire employee lifecycle and in everything they do – every strategy, every hire, every decision. Ultimately, they should become inclusive by instinct” said Nicola Linkleter, President of Professional Staffing.


The report is Inspiring Inclusion In The Workplace - and we need more people to treat this with the urgency it requires.

Here are some thoughts from me on diversity and inclusion at Forbes. Last month - Britain Needs To Rethink Its Love Of Privilege (inspired by the gala charity evening at the Chelsea Flower Show and featuring a pic of one of the young Royals as they are actually extremely good at engagement with all on a very human level, in my view) and one on gender diversity earlier this month. (I have only just noticed it is an Editor's Pick.) Nice.

Here is a good video on #inclusion - via Accenture. Play videos like this in your business, instead of ones that are pure promotional marketing ? It might achieve the same purpose, only better.

And as my software is not working - you will find the video via this tweet

If it doesn't work, look for my Facebook business page, as it is there as well @DinaMedlandWordsThatWork. I dislike paying Facebook to promote the page, so join me there if you like what I flag up in the news. Thank you for reading.

Fiduciary Duty Calls Union To Commit To Divesting Pensions From Fossil Fuels

Posted on June 23, 2017 at 11:40 AM

UNISON, the largest body representing local government workers in the UK, has taken a decision that will reverberate in the fight for climate action in the name of every individual. Its decision should be noted by any business hesitating to act in a post Trump world, but keen to be applauded for its leadership.

The public services union has just passed a motion that commits it to “seek divestment of Local Government Pension Schemes from fossil fuels”. UNISON will now promote to a five-year timeline for divesting "for all pension funds where we have members" from fossil fuels, "giving due regard to fiduciary duty”.

Ah, fiduciary duty. It's high time to redefine it as an obligation when it comes to action on climate risk.

"Our priority always needs to be to ensure our member's pensions are protected. We are increasingly aware that investments in fossil fuels are not only harmful to the environment but put the sustainable future of our pensions at risk. Unison will now extend our campaigns to develop alternative investment strategies to enable pension funds to divest from fossil fuels over a number of years" said Stephen Smellie, Deputy Convenor in UNISON Scotland, who brought the motion to conference.

Local government pensions in the UK are worth over £200 billion and are heavily exposed to fossil fuel companies. An investigation in 2015 showed £14 billion invested in fossil fuels across local government pensions, with Greater Manchester’s pensions the most exposed with £1.3 billion invested (9.8% of its holdings).

"We're thrilled to see UNISON joining the divestment movement. UNISON's decision to divest shows that Exxon and Shell have no place in our future. Stranded fossil fuel assets threaten our pensions. And investing instead into clean energy, public transport, and social housing can kickstart our economy" said Mika Minio-Paluello, energy economist at thinktank Platform who has researched local government pension exposure.

Local government pension funds have already started moving towards divestment from oil, coal, and gas. In 2016 Waltham Forest passed divestment policy, quickly followed by Southwark. Full and partial divest commitments already total £10 billion worth of local government pensions.

Global divestment commitments total over $5 trillion, according to UNISON.

As I wrote on Forbes in May 2015, On Climate Change We Are All Shareholders.

You can find out how much your local council invests in fossil fuels HERE.

FTSE4Good Global Index Adds 77 Companies, Most From US

Posted on June 6, 2017 at 6:10 PM

There is some good news, at least. The emphasis on environmental, social and governance (ESG) issues continues to grow despite Donald Trump.

FTSE Russell, the global index provider, has added 77 companies to its FTSE4Good index, with the largest number coming from the USA, which remains the largest contributor of companies to the index. It reveals in its June semi-annual review of the index that 31 companies have also been removed, reflecting the high standards required for companies to maintain inclusion.

Some 13 Japanese companies were added to the index  alongside companies from a further 11 countries.

The 10 largest firms to be added to the index, in alphabetical order, are 3M Company, AIA Group Ltd, Analog Devices, Applied Materials, Celgene Corp, Colgate-Palmolive, IBM, KDDI Corp, Johnson Controls International PLC and Norfolk Southern Corporation. (my emphasis).

Companies in the index are assessed across over 300 data points, which are applied according to the industrial sectors and countries in which a company operates.

"The area of sustainable investment has changed dramatically with consideration of ESG factors now a core focus for most large institutional investors across asset owners, asset managers, consultants and bank" said FTSE Russell.

According to the latest data from the Global Sustainable Investment Alliance, there is now globally over $22 trillion of assets being professionally managed under responsible investment strategies, an increase of 25% since 2014, it said.

High quality ESG data is essential for the construction of FTSE Russell’s Sustainable Investment indexes and data.

In February, London Stock Exchange Group (LSEG)  issued guidance, through its Global Sustainable Investment Centre, setting out recommendations for good practice in ESG reporting. The report’s intention is to help companies gain a clear understanding of what ESG information investors would like to see provided by companies.

Corporate reporting, corporate governance and systemic risk are increasingly being considered together and were the subject recently of a panel event in London.

LSEG, as a leading international markets infrastructure provider connected to issuers, sell side and investors sees itself as ideally placed to help promote good practice across the industry. The guidance builds on market standards such as the Financial Stability Board’s (FSB) Task Force on Climate-Related Financial Disclosures report and the UN Sustainable Development Goals.

FTSE Russell celebrated the 15th anniversary of its flagship ESG Index Series in December 2016 and there are now over 15 indexes in the global FTSE4Good series.

For more of my coverage of  ESG issues, investors and risk including climate risk, see my writing on Forbes.

Wanna Cry ? Look At Boardrooms And CyberSecurity

Posted on May 17, 2017 at 1:30 PM

It is extraordinary how UK boardrooms repeatedly manage to pass off cybersecurity as some sort of natural disaster that is outside their remit of accountability.

A timely message lands from Brussels making just this point - repeatedly explored by me in posts on Forbes  - but in a different way.

The WannaCry globally-coordinated ransomware attack on 12 May 2017 should put the spotlight on the need for a change in organisations’ thinking about Cybersecurity as it can only be addressed at Board level, says BDO Global, the business advisory firm.

Executive boards need to immerse themselves in the cyber issue and allocate sufficient resources to identify and ensure the effective management of cyber risks: a Board’s accountability includes the way organisations protect, detect, respond and recover, it adds.

"Boards have to lift their organisations to the appropriate level of cyber resilience: this means going above and beyond employee behavioural change programmes and IT departments’ technical measures.

Last Friday’s attack originated in poorly protected workstations, showing that training employees is necessary but no longer sufficient. Cyber threats are more potent than most executive Boards recognise. Companies do invest in security technology - but discover all too soon that the technology is being persistently undermined by different attack methods" says BDO.

Instead, it argues, boardrooms need to move from 'protect' to 'defend' in their thinking about cyber security.

“Ransomware presents a growing threat to every industry, but healthcare organisations are particularly vulnerable. Their digital transformation came late, and the simple reality is that many IT systems weren’t installed with cybersecurity in mind. Because many hospitals rely on end-of-life technology and may prioritise immediate data access over data security, cybercriminals have found their systems relatively easy to penetrate. Hospitals also don’t have the luxury of time: a ransomware infection that blocks access to critical medical data endangers patients’ health. In a scenario where patients’ lives are at stake, the only feasible option, paying the ransom or not, is an extremely tough dilemma” says Shahryar Shaghaghi (USA), Head of International BDO Cybersecurity:

“In a secure environment, executive Boards allocate resources and provide management with the tools to identify cyber risks and apply appropriate mitigation. Cyber-responsible Boards do not just check policy but also oversee and verify the implementation of cybersecurity measures to ensure their effectiveness” says Ophir Zilbiger, Partner at BDO Israel’s Cybersecurity Centre.

I like the phrase 'cyber-responsible boards' - let's hope we hear more of it. It's a lot better than having ostriches in the boardroom.

The link is to a 2014 post on Forbes but hey - three years is a very long time in a fast-changing world. Isn't it time boardrooms caught up ? And then there's the matter of exiting CEOs being paid huge amounts of money despite the cybersecurity breaches on their watch....