Hello and welcome to our weekly intelligence briefing for boards, where we help directors keep up to speed on the macro trends affecting businesses across the world, and corporate governance news.

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Each day FT Leader writers on the Editorial Board meet to discuss the topics to be considered for Leader columns. Here are the issues that dominated this week:

On the biggest story, we continue to write leaders daily on different angles of the Russia-Ukraine conflict. Our sanctions-focused leader applauded the coordination of western nations, but warned: "It will need to show it can take economic pain as well."

Commenting on Joe Biden's State of the Union address, the editorial board concluded that the Ukraine crisis "might give him an impetus that domestic policy no longer does" as his presidency's policy making at home runs out of steam.

And on the energy crisis, clearly exacerbated by the Ukraine crisis, but with plenty of upsides for energy producers, we dismissed calls for retrospectively applied windfall taxes. "Meaningful discussion on how best to reform the tax system"  is important. "Natural resource taxation will be a part of this conversation. Arbitrary windfall taxes should not be."


Yesterday witnessed one of the most destructive days in Russia’s invasion of Ukraine as its forces bombarded frontline cities. In the evening, it was reported that the city of Kherson, a provincial capital and Black Sea port, was captured by Russian forces.

US President Joe Biden’s first State of the Union address to a joint session of Congress on Tuesday hailed western unity against the invasion. Putin was “isolated from the world more than he ever has been”, Biden said, while also hinting that further sanctions could come.

Those measures claimed their first banking victim this week as the Austrian unit of Sberbank fell into insolvency. A range of western companies – from Google and Apple to ExxonMobil, Shell, BP, H&M and Nike – are also pulling out of Russia as sanctions, reputational risks and supply chain problems bite.

The idea that business can hold itself apart from politics and ignore geopolitical risk is wrong,” writes business columnist Helen Thomas. Investors and companies could look at where else they may potentially be enabling authoritarian regimes, she adds.

Interestingly, professional services firms have been slower to act - though the pressure is rising. On Tuesday, Grant Thornton became the first large firm to sever ties with its Russian auditing unit.

And there are concerns that digital assets could help dodge Russian sanctions. Many big exchanges have said they will comply with the measures, but some have resisted calls for Russia-wide bans. The EU is considering new measures to ensure cryptocurrencies cannot be used to circumvent sanctions.

The image of cryptocurrencies could be overshadowed by their “sanctions-busting potential”, warns Lex. Expect large-scale abuses to put the brakes on crypto assets’ uptake by financial institutions,” they add.

But as some companies row back, others are ramping up. German chancellor Olaf Scholz flipped decades of foreign and defence policy this week when he injected €100bn into the country’s armed forces. Shares in its previously unloved defence sector soared in response.

“Expect other countries to follow suit. Global military spending is entering a secular upswing” argue our Lex writers, with European and US companies set to benefit.

There is also the economic fall out of the invasion to consider. Despite surging energy prices adding to inflation concerns, government bonds rallied on Tuesday as investors bet the situation in Ukraine will mean central banks raise rates more slowly than previously thought.

On Wednesday Fed chair Jay Powell confirmed his support for a quarter-point rate rise in March. “The bottom line is that we will proceed, but we will proceed carefully as we learn more about the implications of the Ukraine war for the economy,” he said.

But inflation in the eurozone hit a record in February, with consumer prices rising by 5.8 per cent. The figures put the ECB in a tough spot – while some officials want to tighten monetary policy to tame inflation, others want to wait and see the impact of the Ukraine crisis.

There was cold comfort in the latest report from the UN’s Intergovernmental Panel on Climate Change too. It found that the risks from the climate emergency are greater than previously thought, and present increasing risks to global supply chains.

But there was progress elsewhere as almost 200 countries agreed to negotiate a legally binding UN treaty to tackle plastic pollution and its entire lifecycle. The ambitious resolution made it through despite lobbying from the petrochemicals industry.

Closer to home, and the spring statement is due on March 23. Chancellor Rishi Sunak is not expected to make big changes to taxation or public spending: this week he warned that the  UK economy and public finances were “vulnerable” to inflation and interest rates

The CBI wants more action, though. It called for lower taxes coupled with higher investment measures to boost economic growth and productivity. Without “serious action, we risk the economy simply drifting towards low growth”, said CBI director-general Tony Danker.

Onto corporate governance, and on Monday GSK published a plan to spin off its consumer healthcare business, Haleon, in July. GSK will be able to spend proceeds on R&D and possibly acquisitions, though it will leave its drugs business more open to investor scrutiny.

GSK and Haleon will need time apart to thrive, argues UK business columnist Cat Rutter Pooley. “While conglomerates are unfashionable and demergers all the rage, history shows that in the first year at least the companies involved can have a bumpy ride.”

And finally, business secretary Kwasi Kwarteng clashed with business leaders when he rejected calls for the term “chairman” to be swapped to the more gender-neutral “chair” as the default word used by Companies House.


On Monday Toyota closed all its plants in Japan – and the factories of two subsidiaries – following a suspected cyber attack on one of its parts suppliers.

This happened as governments warned companies about the risks of cyber attacks brought on by Russia’s invasion of Ukraine.

While it makes little sense for Putin to “provoke a broader conflict with the west by launching cyber attacks,” argues innovation editor John Thornhill, war has a way of scrambling logic.”

If this has you thinking about cyber security, there is an interesting feature from the World Economic Forum on why it is an ESG issue.

The National Cyber Security Centre also has guidance on actions to take when the threat situation is more severe.
Inclusion, diversity and equity in 2022: what to expect (Insights from KPMG)
Labour shortages and inflation: why UK labour relations are hotting up  (Feature from the FT)
The need for disclosure about worker voice (Insights from the Harvard Law School Forum on Corporate Governance)
Does mandatory board gender-balancing reduce firm value? (Working paper from the European Corporate Governance Institute)

As GSK announced more detailed plans for spinning off Haleon this week, directors may want to take a closer look at divestment – an issue that is quickly climbing up board agendas.

This article is brought to you by FT Specialist’s Agenda,a publication that focuses on US corporate boards. 

At our recent event, The Rise of Cyber Attacks, Sir Alex Younger, former chief of MI6, discussed how organisations can protect themselves against cyber attacks and how governments and the private sector can work together to build resilient cyber strategies.

The rapid digital transformation of businesses driven by Covid-19 has created new opportunities for hackers to exploit. Never before has it been more important for business leaders to recognise and respond to vulnerabilities in their cyber systems.

Missed the event? You can watch the replay here.

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