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Blog : BOARD TALK

There Is No Room In Better #CorpGov For Politics

Posted on September 25, 2017 at 9:50 AM

As a country, we have an awful lot on our plate at the moment. One word:  #Brexit. While it unfolds, it’s more important than ever that we keep a grip on some fundamental truths on best practice to underpin the runnings of our businesses. “Corporate governance is the very essence of a business” Stephen Green told us, and we forget it at our peril.

There is no room for politics embracing the corporate governance cause in order to use it for short-term political ends, when the ramifications are so important to so many individual lives.

UK Prime Minister Theresa May rather surprisingly picked up the mantle of corporate governance even before she became Prime Minister, vowing to tackle the excesses of top management pay, and put workers on boards. Read Bloomberg at the end of August 2017 on how she has been accused of backing down.

One thing the financial crisis may actually have taught us: trust is gold dust, it translates for business into ££ and for politicians into votes.

At the end of last week, London faced a shock decision by TfL to declare @Uber, the location-based app that allows a cheaper alternative to consumers looking for taxi transport in the capital, as ‘not fit and proper’ to run a business. This is what I tweeted:



But not before Frances O'Grady General Secretary of the TUC , more importantly, had tweeted:

I am no fan of the 'gig economy' when it comes to how it treats individuals, and I believe in regulation setting a standard, or a bar. So what do we do about the 600,000+ people in London who have signed a petition to save Uber ? We ask why it is so necessary to their lives, and the answers are likely to point all politicians for once in the right direction: it's cheap, it's convenient and it meets demand.

Of course it must show it is all those things without abandoning safety and other standards. 'Cheap' won't do it.It's also increasingly important, with these new business models that appear to throw a lifeline in terms of employment to people desperate for jobs, to ensure that they have some security.

But is a business like Uber also threatening ? Yes it is, and perhaps that is where we should start.There is still an enormous amount of ignorance in the UK about technology, innovation and changing business models. Where there is ignorance there is blame - usually directed at all the wrong places. I was reminded of this during six minutes in a cab in Sevenoaks that felt like six hours the other evening, resisting the urge to scream (or comment) while the cab driver explained to me why he was hard done by the changes to taxi services.

The fear factor on innovation is high in Britain outside London. If that were not the case, there would be no long-standing struggle to diversify FTSE 350 boardrooms in every sense of the word.

There is clearly much Uber might learn from the Tfl decision. But it's important that as observers - and citizens - we look at what we can learn as well.

"TfL took the decision not to renew Uber’s licence for security and safety reasons. But the company, which intends to appeal, is puzzled as to why these issues were not raised during the renewal process. Uber passed its annual compliance audit in April but a series of pre-scheduled meetings with TfL were cancelled. Requests to meet Khan were also rejected." says The Guardian.

Has Uber unwittingly found itself in the middle of a political minefield? It's the same one that brought us Brexit, perhaps - so let's make sure we try and see the facts for what they are, and judge the corporate governance by what the business achieves, and how it goes about doing so.

Here's my Sunday #CorpGov cartoon offering, in the Twitter tradition. Board Talk will smarten up and move soon to a new platform, and start again:  look out for it.

Categories: Governance, Accountability, Scrutiny