Journals 2020
Journal 316
December 2020
Featured Articles:
- Challenges for Remuneration Committees
- Risk and reward in private equity
‘It is clear that outcomes for 2020, when reported in 2021, will be scrutinised in the context of Government support, dividend policy, employee experience, share price movement and underlying business performance. A focus on clear communication within remuneration reports is essential.’
Sean O’Hare
‘By providing guidance on what risks, actions and behaviours are expected through reward solutions – as well as which should be avoided – we can improve the alignment of capital providers, investment professionals and company executives to achieve higher quality and levels of Internal Rate of Return.’
Hans-Kristian Bryn and Carl Sjostrom
Journal 315
November 2020
‘As investors become more aware of and active over matters like biodiversity and climate change, they are integrating E&S factors into their overall strategies and capitalising on these new dynamics between investors and boards to demand more action.’
Domenic Brancati
‘It’s getting that balance between the here and now and the future. That’s been very difficult with Covid-19 when we don’t know for some businesses if they’ve got a future. My concern for some CEOs that have done really well is that they’re running on adrenaline and they’ve achieved what they’ve achieved at quite some cost to their personal battery.’
Patrick Dunne
Journal 314
October 2020
‘The often shocking responses to these survey questions and interviews expose high levels of ignorance about the role of the independent director and what governance even entails, amongst the public, policy-makers and even among directors themselves.’
Gerry Brown
‘The VIE structure has provided a workaround structure or shortcut for Chinese companies to access foreign capital over the past 30 years. However, Chinese companies need to understand the risks of the VIE structure and disclose the risk properly for the awareness of investors.’
Lyndsey Zhang
Journal 313
September 2020
‘I commonly find that managers are convinced that corporate scandals are something they read about, but are not intrinsically their problem. They are convinced that they would never behave like that and that it could not happen in their own organisations. This attitude is risky because the whole point about ethical blindness is that it emerges from stressful situations in which sound judgement no longer prevails.’
Professor Guido Palazzo
‘Investors are not “them”; they are “us”. … Policies that suppress investors will not only make companies less purposeful and less productive, but also harm citizens. Investors aren’t the enemy, but allies in growing the pie. Any serious proposal to reform business should place investor engagement front and centre.’
Professor Alex Edmans
Journal 312
August 2020
‘Failure to address the topic of succession planning with clarity may lead to a weakened trust in the board’s quality and ability to select the right leadership to generate shareholder value while addressing the concerns of other stakeholders.’
Luca Giacalone
‘If things go on as they are, we shall see an increasingly bureaucratic, over regulated nightmare blocking the future development of not just the UK’s FTSE 300 organisations but also family companies, entrepreneurs, state-owned enterprises, NHS boards, civic organisations and charities.’
Professor Bob Garratt
Journal 311
July 2020
‘We need to invest in the way we interact. We need to be curious, to encourage others, to be flexible, to be resourceful, if we are to develop our organisational learning capability, our ability to experiment and learn – to be resilient.’
David Lewis
‘Financial fraud is not just the result of individual misconduct or negligence; it has systemic roots. It needs fertile soil to develop, and that soil is the culture in which companies are governed. Instances of fraud expose the flaws in a company’s governance model and ethical commitments.’
Lyndsey Zhang
Journal 310
June 2020
‘Companies might use this crisis to re-imagine the way they communicate with shareholders and forge a stronger, more enduring relationship with investors …. The transformation that results has the opportunity to deepen shareholder engagement in an open, positive and, most importantly, safe manner.’
Jennifer Warren
‘How board members behave in the crisis will define the executive/non-executive relationship for some time in the future - people have long memories. Stress levels will be high for all board members and the impact of high stress and exhaustion need to be recognised and managed.’
Alex Cameron and David Archer
Journal 309
May 2020
‘Parent-subsidiary board co-operation significantly contributes to group cohesiveness in all key areas, such as strategy, risk appetite and control effectiveness. It also helps integrate the culture of the group’s centre with those of subsidiaries and ensures that subsidiary boards and their subsidiary-only non-execs are well aware of the values of the parent and can therefore lead subsidiaries in the culture area.’
Stilpon Nestor and Catalina Fuentes Benitez
‘I’m going to be encouraging people to have a decision-list instead of a to-do list. One of the challenges at the moment is we might have ten decisions to make, but if you only need to make half of them now it’s important to get those five right. We need pace but it’s important to get things right and reflection is powerful.’
Patrick Dunne
Journal 308
April 2020
Featured Articles:
- Risk, actions and behaviours (Part 1)
- Governing through the lens of fairness
‘Indeed, how companies respond to the coronavirus crisis seems set to be a defining moment not just for each individual company but also for capitalism itself. It is also a moment when companies and their leaders can demonstrate real leadership and deliver on responsibilities to their stakeholders.’
Paul Lee
‘Most stakeholders, from the factory floor to the company’s owners, would see the purpose of a company as making a profit. It is hard to argue against the importance of profit, however, it is a bit like oxygen – a necessary but not sufficient reason for existing as an organisation.’
Carl Sjostrom and Hans-Kristian Bryn
Journal 307
March 2020
Featured Articles:
- ARGA legislation - will it ever happen?
- Five trends for boards to watch
‘For some reason, the government has been astonishingly vague about ARGA legislation. Nevertheless, it is clear that the FRC strategy under Sir Jon Thompson is to press ahead as vigorously as possible to create and gear up a “virtual” ARGA to the extent that it can without actual legislation.’
Richard Smerdon
‘There will be no more room for directors who cannot quickly grasp the effects of tech disruption on business models and industry landscapes. Technology has come out of the back office and become a strategic imperative, destined to be woven through every cell in many companies from agriculture to surveillance.’
Diana Wu David
Journal 306
February 2020
‘While we cannot expect every board member to have expertise in data science, a real understanding of technological principles and the risks, regulatory, and social implications of AI certainly should be a pre-requisite for board members in any AI-centric company or one planning to capitalise on AI in the future.’
David Nolan
‘Companies often have inconsistent statements about board diversity spread across three or more sections of their annual report, making it difficult to identify their position on diversity or how they demonstrate accountability for change.’
Tracey Brady
Journal 305
January 2020
‘Those that treat supply chain sustainability as an incremental compliance exercise will fail to take a stand and therefore find themselves with a shrinking pool of potential customers and investors as more people filter out brands that lack a clear story of positive impact.’
Pendragon Stuart
‘We all have a natural way of talking and thinking, developed over many years, but to be effective, non-execs have to make an effort to conserve their contribution for when it really matters. It is not their place to demonstrate that they have a technical understanding of the issues being debated; they wouldn’t be there if they didn’t. It is their place to demonstrate the behavioural skills needed to get the board to be more effective.’
Murray Steele
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