Blog : BOARD TALK
|Posted on May 1, 2015 at 7:15 PM|
Today the UK's watchdog on corporate governance, the Financial Reporting Council (FRC) said it was going to look at the quality of explanations by those companies that choose not to comply with UK Corporate Governance Code."
Does that mean 'comply or explain' is now being recognised as a flawed means of spreading 'principles' rather than 'rules' when it comes to corporate governance? The 'wiggle room' has clearly proved to be enormous.
But the FRC is certainly not saying that, as its Chairman, Sir Win Bischoff, made clear in his speech at the Grant Thornton Governance Dinner last night. (I wasn't there- but I have the speech and it is on the FRC website).
So - 'looking at the quality of explanations' seems to be British-understatement-speak for 'making very certain that companies are taking the business of being listed in London with all that it involves, seriously.' And that may well be waffly language for wider concerns on the UK Code. We will have to wait while the FRC works out exactly what it is willing to say further on this subject.....
Meanwhile.....it is good to have a business (mining, no less) demonstrate how thinking innovatively about what it needs in terms of recruitment at the top can break mental barriers about suitability, and also tick all the right 'corporate governance' must-have boxes - such as diversity, the best talent for the job - and so on.
Barrick Gold, the world's largest gold producer by output, is hiring one of the UK mining sector’s best known fund managers as part of executive chairman John Thornton’s push to improve the struggling company, according to the Financial Times.
Yes- it's THAT John Thornton, the former Goldman Sachs banker - which could explain a change of thinking. And the name of the BlackRock fund manager? Catherine Raw.
"She was co-head of its largest mining fund and highly critical of the performance and strategy of most of the world’s largest gold miners. The sector needed 'to start seeing some really painful decisions being made', Ms Raw said in December" says the FT.
Ms Raw is to join Barrick Gold's leadership team as executive vice-president for business performance from today -May 1, it reports.
Kudos to Barrick Gold for looking out for what it needs. The mining industry - and business in general - should be watching.
Herd mentality on issues of strategic significance for a business (which is what corporate governance should be about - after all, Lord Green in his previous incarnation as Stephen Green said effectively that) is to be discouraged. Otherwise we will never have innovation.