Patrick Jenkins
November 25, 2021
 
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.

We hope you enjoy it and, as always, email your suggestions for stories and resources to [email protected]

You can also find more news and resources on our online hub FT.com/Board.
 
 
 
 
 
A look ahead with the FT leader writers
 
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:
The Editorial Board slammed Boris Johnson's lightweight speech to the CBI. The prime minister's fun-focused contribution had serious implications, betraying his "lack of interest in and respect towards business". The PM's view of CBI members as "another group of elites needing to be brought down a peg may be a vote winner" for now. "But that is short-sighted."

Leader writers also discussed the welcome agreement of a three-way coalition in Germany, under the chancellorship of the SPD's Olaf Scholz. Stability in the EU's biggest economy is particularly welcome given the economic and geopolitical challenges ahead.
In the coming days we may also opine on the relative merits of mutual and private ownership, given the ongoing saga over the planned takeover of insurance group LV by Bain Capital.
 
 
 
 
 
 
 
 
My pick of the week’s stories
 
The week was off to a steady start as US President Joe Biden nominated Jay Powell for a second term as chair of the Fed. But while his confirmation should be smooth, Powell’s tenure will be anything but as  he faces tough economic forces including high inflation. 

The news prompted a decline in both the  S&P 500 and the Nasdaq on Monday  as traders saw the choice as a signal that Biden approves of the central bank becoming more hawkish.

Indeed the administration is under pressure to tame rising costs. The core personal consumption expenditure index – a key inflation measure in the US –  posted its biggest year-on-year jump since the 1990s in October.

Biden announced the US would release 50m barrels of oil from reserves in an effort to drive down petrol costs. The only problem was that crude prices rose in response, with Brent up 3.3 per cent at $82.31 a barrel on Tuesday.


From oil to sustainability, and the ECB’s​​ first assessment of banks’ preparedness to cope with climate change risk made for uneasy reading. No institution in the review was close to meeting the central bank’s expectations, and it asked them to “urgently” improve plans to protect their businesses.

And in the UK,  CBI members are ready to work with ministers to support levelling up,  according to the employer group’s director-general Tony Danker. The organisation’s annual conference, which started on Monday, was split across sites outside London for the first time.

But there is a warning from business columnist Helen Thomas. The UK’s new national security regime around takeovers is much broader than many people think, she argues – in fact, it is an “expansive, ill-defined regime that lacks transparency”.


In corporate governance news, Bina Mehta’s tenure as chair of KPMG UK was extended until 2024, while Lord Stuart Rose was appointed chair of Asda.

But Stéphane Richard, chair and chief executive of Orange, handed in his resignation at a board meeting on Wednesday. He will leave by the end of January 2022 after he was given a one year-suspended prison sentence in a fraud case unconnected to the company.

Also interesting was the SEC’s approval of the “universal proxy”. While our Lex writers concede that the move has taken away the costs associated with challenging management, they note that it also risks forcing companies to entertain the whims of gadflies.


And finally, a reminder that even seasoned chief execs can sometimes get it wrong. Jamie Dimon of JPMorgan Chase apologised twice on Wednesday after telling a group of US business leaders that the bank would outlast the Chinese Communist party.
 
 
 
 
 
Critical resources
 
 
It has been an interesting week for remuneration. Asset manager Legal and General Investment Management decided to stop almost all direct feedback to companies on executive pay after finding it was mostly ignored.

But PwC analysis of annual reports suggests investors have flexed their muscles during the pandemic. It found that median total remuneration for FTSE 100 chief executives dropped 9 per cent in the 2021 financial year.

If you are looking ahead, Clifford Chance has a useful briefing on the Principles of Remuneration for 2022, published recently by the Investment Association for listed companies.


And don’t forget, there are plenty more resources on our online hub FT.com/Board.
 
 
 
 
 
 
 
More resources to bookmark
 
 
 
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Audit and risk
 
 
 
 
Developments in audit (Report from the Financial Reporting Council)
 
 
 
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Workforce
 
 
 
 
Route to the top 2021 (Report from Heidrick & Struggles)
Where did all the workers go? (Feature from the FT)
 
 
 
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Strategy
 
 
 
 
 
 
 
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ESG
 
 
 
 
 
 
 
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Technology and cybersecurity
 
 
 
 
 
 
 
 
 
 
 
Latest event

At our event last week, Forecasting the World in 2022, a panel of FT experts discussed their predictions for the world in 2022, how these are likely to play out over the next few years and the ways they might affect global businesses.
If you weren’t able to join, you can watch the replay here .

 
 
 
 
 
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