Paul Moxey

Whose culture is it anyway?

‘In practice it may be found that controls may make it harder for people to innovate, take personal responsibility or exercise common sense. The need for accountability might help qualities such as trust but it could also harm them. Boards must also ensure a suitable balance is struck between the desire for profit and the desire to avoid risk. In competitive sectors success depends on innovation but innovation is not possible without risk.’

Cas Sydorowitz

The changing face of activism

‘In preparation for future campaigns, many activist investors are coming to London to engage in “Listening Campaigns” with many of the long-only, household name investors. Clearly the activist will have their own views on their specific target but instead of launching into their own discourse, they are more interested in hearing what other shareholders in the target view the company in question.’

Professor Colin Coulson-Thomas

The future of governance

‘Has corporate governance become a process of compliance with standard and external approaches, codes and models that seem detached from the practical process of business building and satisfying stakeholder interests? Some boards delegate the observance of codes – or doing just enough to justify ticking a box – to a corporate legal or company secretarial team, rather than think about better ways of operating, or how a board might add more value.’

Dr Hans-Christoph Hirt

The role of stewardship

‘The role leading institutional investors choose to play in the governance of listed companies in which they invest is principally driven by the nature and size of their holdings, significantly affected by diversification, and resourcing required for various stewardship activities at home and abroad. As such, it is ultimately a costs-benefits analysis, which also involves forming a view on the potential for free-riding.’

Dr Chris Pierce

Corporate governance and small islands

‘In the last five years many islands have developed Corporate Governance Codes .... Many of these islands have learnt lessons from the OECD countries which have well-established Codes and so these new Codes have leapfrogged to the forefront of governance innovation. Examples include the Mauritian Code of Corporate Governance that contains guidelines for different sectors, scorecards, and international benchmarked data.’

Edward Craft and Colin Jones

Improving the quality of reporting

‘Because smaller companies often struggle to attract a good level of analyst research, the annual report and accounts may present itself as the one genuine opportunity in each year for those companies to deliver good and clear messages to investors. Such opportunities should not be squandered.’

Alan McDonnell

Ireland – a ten-year governance journey

‘In 2015, Ireland has two legacies of its recession caused by poor governance to carry into the future – the first is a very large national debt to work through for many years to come – the second is a widespread awareness of what good governance means, and its value, not just in the corporate world, but across society as a whole.’

Haydn Main

CG statements: A case for change

‘At present the rules fail investors and other stakeholders by not mandating greater transparency in relation to the senior executive body – at a time when boards are drifting further towards a purely supervisory role – leaving the reader with an increasingly incomplete picture. For UK plc to retain its reputation as offering the gold standard in governance, a new approach is needed ... The extension of the corporate governance discipline to the senior executive body is not a radical expansion of the UK governance model, but an essential means of achieving its central purpose.’

Peter Montagnon

Checking culture

‘Yet this is not just about strengthening compliance. Ideally a company should strive towards a strong culture in which compliance comes naturally. In a customer services business, for example, the ideal culture is one where people provide a great service because that is the culture of the organisation, not because they are complying with policies that tell them to do so. Looked at this way, a strong culture can help a company deliver success.’

Mark Cardale

The Strategic Report: its status and significance

‘The issues of linkage and placement are tied up with the place of the Strategic Report within the Annual Report, which will also include, for listed companies, the Directors’ Remuneration Report, the Directors’ Report ... and the Corporate Governance Statement ... in addition to the financial statements and now lengthy auditors’ report. This is frankly all rather messy, and inevitably makes for a long read – difficult in the short period immediately preceding a company’s AGM. It may also detract from the Strategic Report’s intended status as the “top layer” of information for shareholders’.

Larry Fink

Investor guidance on corporate interactions

‘Constructive dialogue between investors and companies helps business leaders be the best they can be. Understanding investor views and concerns helps boards and management make better informed decisions. They are still free to make an apparently contrary decision when they believe that the outcome would best serve the interests of the company. And, more often than not, clearly articulated investors’ views and questions will influence company leaders’ thinking, particularly if they reflect a growing consensus.’

Professor Andrew Kakabadse et al

EQ in the boardroom

‘The key findings of this study illustrate how high-performing company secretaries ultimately help build trust, which results in good governance. Many company secretaries acknowledge that their individual discretion, freedom of choice, personal morals and ethics are important in positively impacting corporate judgement.’

Dona Roche-Tarry

Digital know-how

‘So translating technological advancements into business benefits is now a fundamental plank of strategy for pretty much any large customer-facing business. Like it or not, they are now technology companies, and that means that they require leadership teams with a deep understanding of what this entails.’

Robert AG Monks

The End of the Beginning

‘Ownership needs to expand its agenda for the future. In the globalized world of commerce, effective and legitimate corporate functioning will require leadership from the business community and co-operation from governments.’

International Corporate Governance Network

Differential ownership rights

‘These guidance statements outline the importance of investors making effective use of voting rights at shareholder meetings, and to engage intelligently and pro-actively with investee companies on strategy, corporate governance and both financial and non-financial risks related to long-term performance. This in recognition of the fact that both companies and shareholders have a mutual interest in protecting and generating sustainable corporate value over the long term.’

Christopher Bennett

Has the time of ‘behavioural governance’ come?

‘It’s important to stress that the factors described affect all participants in the corporate governance eco-system – regulators, academics and commentators are not exempt from bounded rationality, satisficing behaviour, heuristics, politics, making ethical judgements or the framing of issues in terms of the cultures into which they are entered. To enhance corporate governance beyond compliance a behavioural approach will be required from all.’

Alex Edmans

Getting companies to invest long-term

‘... unlike a factory which is easily visible to investors, the fruits of intangible investment take several years to appear. Thus, a manager pressured to maximize short-term earnings may underinvest in his company’s future. This problem of “managerial myopia” is well-known, but proposed solutions are typically piecemeal. Instead, the problem is holistic – it depends on how managers are paid, how shareholders evaluate companies, and how regulators mandate corporate disclosure.’

Alex Cameron and David Archer

One evaluation framework for all boards?

‘To explore the differences and similarities between sectors when it comes to board improvement we recently conducted a survey of over 100 board members and then brought invited guests together to discuss the results. ... The headlines were pretty clear, whilst boards in the charity and public sector will have a different mission to a PLC board when it comes to their own operation: the setting of priorities, the way they make decisions, getting access to the right skills, and critically how they view their own performance improvement, there were far more similarities than differences.’

Christopher Bennett

Governance and behaviours

‘Achieving good corporate governance undoubtedly requires an appropriate regulatory and legal framework and a sound knowledge of it. However, as long as organisations are run by human beings, those in positions of influence in organisations and those responsible for regulations will need to have a good understanding of behaviour and the factors that impact it.’

Ghislain Giroux Dufort and Denis Lavoie

Risk oversight

‘... by requesting that risks be filtered and prioritised strategically, assessed and drilled down factually and rigorously to their true meaningful sources, and monitored at the source through risk appetite statements established on objective and measurable leading key risk indicators, directors can rest assured that they add value and enhance performance by focusing the board’s attention on the right risks and the right trends.’

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