Journals 2018
Journal 292
December 2018
Featured Articles:
- CG – science, craft or art?
- Changing requirements and the future of CG
‘Governance is about the quality of management supervision, ensuring that the company is managed in the interest of shareholders and other stakeholders. Compliance is about adherence to rules and regulations which are a necessary, but not a sufficient, condition for good governance. Used in the context of a football game, governance describes the quality of the game, while compliance ensures playing by the rules.’
Dr Florian Schilling
‘The structures, memberships and practices of boards may need to change to ensure that they remain relevant and can continue to discharge their responsibilities, including providing the responsible, shared and transformational leadership required to cope with a changing and uncertain business environment.’
Professor Colin Coulson-Thomas
Journal 291
November 2018
‘I have found that if the founding entrepreneur has planned and formulated the succession process earlier, and if the successor has been guided by such a well-structured process for training and empowering his decisions, then business value during the process of succession tends to suffer less or in fact even increase as there is less likelihood of a damaging power struggle.’
Yin-Hua Yeh
‘While some boards may be reluctant for the fear of challenge, the reality is that visible stewardship through engagement is a corollary to strong governance and empowers both management and the board. This is governance in action.’
Michael Henson and John Dawson
Journal 290
October 2018
‘It has long been a personal red flag of mine to worry about companies whose only stated aim is the promotion of shareholder value. So many such companies boom marvellously for a short period of time and then see massive value destroyed as they find that narrow self-interest destroys value over time – destroying the very thing the directors claim to be targeting.’
Paul Lee
‘Given that complex organisations are governed by layers of management, shareholders and public oversight, there is great benefit in articulating these boundaries by defining the company’s reward philosophy and risk appetite.’
Hans-Kristian Bryn and Carl Sjostrom
Journal 289
September 2018
‘A lack of consistent financial evaluation of the timing and scale of climate change impacts was cited as a barrier by several respondents – and this was linked with another barrier, the perceived gap between the long-term effects of a warming climate and a much shorter-term focus to most boardroom discussions.’
David Archer and Alex Cameron
‘As US-based investors build out their engagement teams in Europe and beyond, and European-based investors grow their presence in the US, a continued cross-pollination of engagement themes and styles is a likely result. Being able to adroitly navigate the shifting landscape will be a defining challenge for companies and boards in the years ahead.’
Bob McCormick and Rob Zivnuska
Journal 288
August 2018
‘Although the FRC’s Guidance on Board Effectiveness states that in order to protect the company’s long-term interests, difficult board decisions may “sometimes” adversely impact stakeholders, section 172 cannot prevent directors taking actions that are contrary to stakeholder interests or even the long-term interests of the company. No doubt such a company would not thrive. Nevertheless the section does not guard against bad business judgements taken in good faith.’
Professors Joan Loughrey and Terry McNulty
‘Society and key stakeholders have more expectations than ever before in companies and they expect companies to be part of the solution within society, rather than the problem. The growing recognition that “good” business behaviour supports strong financial performance is becoming the norm.’
Anne Kirkeby
Journal 287
July 2018
‘With Board Reviews now seemingly such an established part of the board’s annual cycle – and given the commitment of time and resources that a board is undertaking when embarking on a Review exercise – it is incumbent on all of those working in this space to focus on moving the practice forward.’
Philip Sydney
‘I find the Wates Principles refreshingly simple and uncomplicated. They provide scope for each company to clearly articulate their enterprise processes and attitudes that add value to their business, help build its reputation and ensure long-term continuity and success. That is the essence of good governance and if companies cannot clearly articulate that for themselves that should be a red-flag.’
Vanessa Jones
Journal 286
June 2018
Featured Articles:
- Governance in the post-industrial transition
- Removing toxic governance
‘Mature firms face an onslaught on multiple fronts. The exponential growth in computing, storage and communications capacity we have seen over the last few decades is giving rise to a wide range of powerful technologies. … Coupled with easy access to funding (due in part to low interest rates), this is lowering the threshold for new entrants disrupting established industry players.’
Frode Odegard
‘Whether audits are for investors, directors or shareholders the auditor’s role is to judge the integrity of director accounts. It is ethically unacceptable for any law judge to be influenced or paid by the people they are judging. However, this conflicted toxic relationship is what regulators promote.’
Dr Shann Turnbull
Journal 285
May 2018
‘Controlling families may need to adjust their traditional concept of succession and at the same time ensure robust governance of their firms. Modernising the firm’s internal corporate governance and making a smarter succession decision (ie non-family succession in highly competitive and risky industries) can help maintain investors’ confidence in their investment strategies.’
Dr Yin Hua Yeh
‘On reflection, Forum committees today bear little resemblance to those that started out on this journey three years ago. Our learning at each of the journey’s milestones has helped assemble a BAF model which we collectively believe enables our committees to provide a better service to each board by orienting; aligning; assuring and reporting on their governing priorities - their strategic objectives.’
Alan McDonnell
Journal 284
April 2018
‘Whilst some AIM corporate boards do set out a fair amount of their own independent thinking on the issue, in the main most others have reached for ‘boilerplate’ statements that look suspiciously similar to each other! Without any requirement to link these statements to any particular corporate governance code, it has been easy to skip over much of the detail.’
Gervais Williams
‘In our survey of executives across the globe, we found that a majority, 93 per cent, think effectively explaining value creation in corporate disclosures is important. … At the same time, a majority reported a lack of confidence that their businesses disclose the right information externally, or capture the right information internally.’
Sallie Pilot
Journal 283
March 2018
‘New disruptors come daily. Digitalisation starts with a clear commitment to the new culture from a leadership team and shareholders. Therefore, boards should look not just outward, but inward too.’
Elena Lokteva
‘Moreover, where digital strategy was essentially focused on cost-cutting and other defensive tactics (particularly as regards incumbents fighting off disruption to traditional commercial models), the survey found that the return on digital investment was typically poor. Digital strategies are often played for high stakes.’
Michael Carter and Catherine Hammon
Journal 282
February 2018
Featured Articles:
- Corporate governance of private equity-backed companies
- Evaluating board performance
‘So, while it is obvious that good decision-making, facilitated by a well-designed process that is staffed by well-informed and competent people, is an essential component of any successful organisation, corporate governance processes in a private equity-backed company are defined and judged largely according to their fitness for that particular purpose. Listed companies and their investors might take note of this aspect of the private equity model …’
Simon Witney
‘Most directors find the individual interviews to be helpful in their own right and value the collective discussion following the feedback. It can be a lonely task being a board director so this time set aside to review and reflect, if used wisely, can be a useful critical eye.’
Alison Gill
Journal 281
January 2018
Featured Articles:
- Corporate Governance Behaviour Review 2017
- Culture and non-executive directors
‘Investors want to read statements that are unique to a company and that express the company’s distinctive character. The direct message from investors is be honest and truthful in drafting your company’s report.’
QCA/UHY Hacker Young Corporate Governance Behaviour Review 2017
‘So culture isn’t something that should be “owned” by one person as “head of culture” or delegated to HR. Culture starts at the top. How the board behaves both individually and collectively sets the cultural tone and defines the ethical and moral boundaries that ripple through the organisation.’
Joëlle Warren
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