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:

Boris Johnson heeded the plea of our leader and calls from many of his own colleagues to go - and now. Support for the prime minister waned by the minute yesterday and today. “The Johnson era is ending. It would have been better for the country if it had ended months ago,” was our verdict.

Earlier in the week, we had called on western companies to honour the pledges they had made to pull out of Russia, in protest against president Vladimir Putin's unprovoked war on Ukraine.

A Yale study found that of more than 1,000 companies that had promised to leave, only 305 had made a "clean break". "Western governments," we wrote "have chosen [...] to pressure Moscow by economic means [...]. There is a compelling case for most western companies - except those selling, say, vital medicines - to join this effort.”

In the coming days we will return to the UK, and this time to the topic of insurance regulation, as the Bank of England comes under pressure to relax rules to facilitate more investment in UK infrastructure.
After days of political chaos, UK prime minister Boris Johnson’s turbulent three-year premiership is over.

Johnson has quit, after a dramatic two days in which more than 50 members of his government resigned and he faced the threat of being ousted in a second vote of no confidence in a month. With Johnson’s political authority demolished, even his newly appointed chancellor, Nadhim Zahawi, told Johnson to go .

Johnson wants to remain as caretaker prime minister until October, and his refusal to leave quietly may prompt further disquiet in the party. Brandon Lewis, the Northern Ireland secretary and a one-time loyal Johnson supporter, said Johnson’s situation was “past the point of no return”.

Sterling jumped 0.5 per cent against the dollar on the news. But other problems are behind a broader weakness for the pound, such as rising US interest rates and the effects of Brexit, as the FT’s Katie Martin pointed out earlier in the week.

“Brexit true believers hate to hear it, but the economic impact of our messy divorce from the EU hurts,” she writes. Some investors believe the worst is yet to come.

Who will replace Johnson? Find our guide to the runners and riders here.

Elsewhere, the homeworking revolution continues to cause problems for business - and the property market. Even prime commercial property is struggling.

Swiss bank UBS needs less space than it did at the start of 2020 , so will sublet two floors of “grey space” at its landmark London headquarters, a sprawling 12-storey “groundscraper” in the City of London. The bank’s flexible working policy means two thirds of staff are not around for at least part of the week.

In Europe, property markets are slowing generally as investors adapt to the “new paradigm” of rising interest rates and economic turbulence, according to Brad Hyler, head of Brookfield, the Canadian private equity fund with a $52bn portfolio in the UK and the rest of the continent, including laboratories and life science campuses, rental accommodation and student housing. Hyler warns that values for assets such as poor-quality office blocks could fall sharply.

And it is not just property; the so-called great resignation means organisations lack staff with experience of dealing with economic gloom , says FT management editor Andrew Hill. Some are searching for “pop-up managers” with hands-on experience of double-digit inflation and economic recession. Fluency in 1970s industrial relations is an advantage.

Bosses are quitting for ”all too human reasons”, says the FT’s Henry Mance, including to work on personal development. Andrew Formica, 51, head of UK fund manager Jupiter, announced that he was quitting to spend more time doing very little. “I just want to go sit at the beach,” he told Bloomberg.

In ESG news, the US Supreme Court last week effectively prevented the Environmental Protection Agency from regulating carbon emissions, which at first glance seems good news for business.

But the FT’s Brooke Masters argues that the decision leaves government and regulators hamstrung in their ability to address policy, warning that unbridled deregulation tends to be followed by scandals that ultimately lead to greater scrutiny and regulation - and shifts the focus on climate change to big investors.

More immediate disappointment for environmentalists in the US proxy voting season. Activists have filed nearly 400 environmental and social proposals , but support is waning for green petitions, reflecting Russia’s invasion of Ukraine, which has forced companies to rethink energy security . As one adviser put it: “As long-term shareholders, we need to be as pragmatic as possible.” In another blow for green campaigners, the EU parliament this week voted to designate gas and nuclear as sustainable.

As the FT’s Moral Money team points out , scrutiny of the voluntary carbon offset market may be growing, but critics are saying some projects have far less impact than they claim.

More resistance among investors to the ESG directive. In the UK, Sainsbury’s investors will vote this week on whether the supermarket should commit to paying its staff the living wage - a rate above the legal minimum. They are unlikely to do so, despite the fact that many of the supermarket’s contingency staff are unlikely to earn above the living wage.

And in a bad week for business travellers, British Airways is to cut more than 10,000 short-haul flights between now and the end of October, reflecting industry-wide staffing problems and looming ground-staff strikes. The carrier has now cut 13 per cent of its original summer schedule.

Ryanair chief Michael O’Leary Indicated that the budget airline’s prices would rise , saying: “This is without doubt one of the inevitable consequences of the disaster that has been Brexit.”

It is not the only airline dealing with turbulence. The Scandinavian carrier SAS faces industrial action , filing for bankruptcy protection this week as it warns a pilots’ strike was deepening its long-running financial troubles. And EasyJet’s chief operating officer has quit after 10,000 of cancellations caused by staff shortages.

The FT’s Lex column assesses the state of a sector previously hailed as one of the best ways to trade.
Accelerating Business (Special Report by FT)
Why machines can never be moral (book review by FT)
Chief executives’ private lives: how much boards should know

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

How will the risk of recession affect M&A trends? How prepared are dealmakers for global economic volatility? Join senior industry leaders and the FT’s Ortenca Aliaj, the FT’s M&A correspondent, for insights in this webinar from FT Live on Tuesday 26 July at 2pm BST. Learn more here.
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