Blog : BOARD TALK
|Posted on November 5, 2013 at 11:45 AM|
Things are looking up a bit. At the CBI's annual conference yesterday, there was much talk about business and trust. And the UK's Financial Conduct Authority (FCA) has strengthened the rules for a London listing.
At the CBI conference we were treated to some good conversation, including a panel chaired by a bright female journalist holding four businessmen displaying varying degrees of the 'squirm factor' under determined, but non-combative, questioning.
With ITV's business editor Laura Kuenssberg asking the questions, we learnt that the CEO of British Gas owner Centrica plc Sam Laidlaw, would forego his bonus this year if the board offers him one.
This came after Sir Mike Rake, the CBI's President, commenting on energy, had said in his opening speech : "People are, of course, concerned about rising prices; they feel, rightly or wrongly, that they're being unfairly treated.There are no easy answers here, but the public deserves better than politicians playing the blame game."
Businessmen are trying to work out how to deal with an increasingly angry and vocal public - which represents their consumers, or clients. Ms Kuenssberg wanted to know if they thought the question of tax was a moral issue. Justin King, CEO Sainsbury's got a round of applause for saying it absolutely was - "our customers have the right to demand that we pay our fair share of it" he said.
Sir Philip Hampton, chairman of RBS, had another perspective on whether tax was a 'moral' issue: "It is, if people think it is" he said. Exactly. It's time business listened to what its customers think - and to what they want, both as consumers and as shareholders.
The UK's watchdog, the FCA has been doing some observing, albeit rather slowly. Having watched the riveting and drawn out corporate governance soap operas that have played out at companies like Bumi plc and Eurasian Natural Resources Corporation (ENRC) - both mentioned so often in this blog lots of respective ears should be burning hot - they have attended to the rules for a London listing.
The detail is in the FCA link above - and very welcome it is as well. The time delay does make one wonder if the current love-in with China will play out in a similar fashion of exuberance and open arms followed by lessons learnt and the sound of doors discreetly shutting. Boris Johnson, Mayor of London's gleeful cry yesterday: "The Chinese love us, and they can't get enough of us' is still ringing in my ears.
But amid the excitement of more protection for minority shareholders in the rule changes by the UK Listing Authority, it is worth not being too grateful for these changes - the point of corporate governance is to strive for the best, not the 'just good enough.'
I couldn't have put it better, so I quote Jonathan Guthrie in the Lombard column in the Financial Times, if you don't have access to FT.com - emphasis is mine.
"But an honour code really only works when you are dealing with the honourable. In practice, UKLA needs to reject listing applications from businesses with the most obvious potential to damage the reputation of the London market. It has already hardened its line. To restore confidence, the body needs to demonstrate good judgment, not just an ability to rewrite the rule book."
Good leadership of course, is all about good judgement - and not just the listening.