Blog : BOARD TALK
|Posted on November 29, 2016 at 10:45 AM|
Corporate governance is increasingly, booming business. I know this to be true for many reasons, not least because the annual governance awards handed out by ICSA: The Governance Institute are now firmly ensconced in the spacious spaces of the London Hilton. Look out for them tonight on social media.
Ever since UK Prime Minister Theresa May first uttered the words ‘workers on boards’ the sound of frenetic lobbying has filled the air. She talked about reining in executive pay, even before she was Prime Minister.
This morning, on the Today programme on BBC Radio 4, we heard Frances O’Grady, TUC General Secretary, again point out that it is not uncommon – in Europe – to have workers on boards.
And we had the usual opposing view from Tom Gosling, a remuneration partner at PwC who seems to be paid to go on as many public forums as possible to make sure the status quo on boardroom pay never changes, and is never re-thought. If you look carefully, you will see there is little original thought in his arguments – but the force of repetition, obfuscation and sometimes even dis-information – is, as we have seen in 2016, a powerful thing.
The thing is, no one knows what this Prime Minister really intends on corporate governance – she does have a lot of things on her mind, after all. Today’s green paper from the government might clarify things – it is to have a section on remuneration, one on stakeholder engagement and another that considers to what extent the first two should apply to private companies.
The Guardian reports this morning that she is “to promise a crackdown on boardroom excess at large privately owned businesses as she unveils proposals intended to hold corporate Britain to account.”
I covered BHS – A Story of Personal Greed And The Unacceptable Face of Capitalism and Sports Direct – The Case Of A Listed Business With a CEO ‘100% Unaware’ Of Human Rights Violations on Forbes.
However else you feel about 2016, it has been a year of steadily rising voices on the role of business in society. At the heart of that relationship are people - be they employees or customers. We need to stop making corporate governance so grand, and think about how business practices affect people.
Which means that we need also, to talk realistically about corporate pensions - see It's About My Pension, Stupid: Pensions Are A Corporate Governance Issue - posted on Sunday on Forbes.
Howard Sherman is business manager for corporate governance and accounting at MSCI, which is behind the report mentioned there. I just spoke to him.
Know what helped spark that research ? "As an American working in London I looked at the BHS collapse and thought - how could this happen?" he says. It made him want to look at pensions more widely - and MSCI of course engages regularly with institutional investors around stewardship, so it was an obvious choice of subject.
We can create a virtuous circle on corporate governance - or we can dodge the issues and hide behind experts. Ultimately, it depends on what sort of business and what sort of society we want to create.
For some, that is exciting - and for others it is akin to opening Pandora's Box. Mrs May may have lifted that lid - and your stance on it might depend on whether or not you have 'vested interests.'
Among those who sit in boardrooms and are able to speak up on such issues of importance are of course, the company secretaries. They will be out in force tonight in the London Hilton.