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, you can find the latest stories and resources on
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:

Analysing the market correction of recent weeks, the Editorial Board concluded that May 2022 may come to be seen as the tipping point after a prolonged bull market: “Worries about inflation have been joined by worries about recession - one that central banks may cause or worsen in their efforts to cool economies.”

Today, in the wake of the long-awaited Sue Gray report into "partygate", we have reiterated our view that the prime minister is not fit to run the country. “Boris Johnson has irrevocably broken the bond of trust between the elected and the electorate.”

Earlier, we had reflected on the cynical contradiction at the heart of Goldman Sachs' new unlimited holiday policy for senior staff. “Telling high-performing workers in a cut-throat environment that they can take off all the time they want means very little time is actually taken.”

This week, activist shareholders took boards to task on what they see as a litany of failings, from ESG complacency to mediocre performance - often resulting in conflicting agendas that are increasingly challenging for companies to navigate.

Shell is attempting to satisfy a complex set of demands. It has seen a drop in investor support for its climate strategy. But at its AGM, a group of activist shareholders opposed the company’s development of fossil fuels, delaying proceedings for almost three hours.

More complexity at HBSC, where a provocative speech on climate led the bank to suspend Stuart Kirk, head of responsible investing at HSBC Asset Management, pending an investigation.

“Who cares if Miami is six metres under water in 100 years?” he asked rhetorically, at the FT Moral Money summit last week. “Amsterdam has been six metres under water for ages, and that’s a really nice place.” He was attempting to make the case that central bankers and policymakers are overstating the financial risks of climate change, but not everyone saw it that way.

Some accused him of flippancy. But others welcomed his willingness to identify what they see as groupthink and inconsistencies in ESG investing.

Either way, HSBC has been under intense pressure from campaigners and shareholders for its role in financing companies with substantial greenhouse gas emissions.

Meanwhile, Amazon’s 14th biggest shareholder, Legal & General Investment Management, effectively told Amazon founder Jeff Bezos to drop dead by voting against a raft of management proposals, including the election of several Amazon directors that include Bezos himself - the retailer’s former CEO.

Its rationale? “LGIM expects a board to be regularly refreshed in order to maintain an appropriate mix of independence, relevant skills, experience, tenure and background. LGIM also considers the CEO of the company to be accountable for any long standing ESG failings.”

LGIM follows Schroders, which last week said that it, too, would be voting against Amazon’s management’s recommendations in three workers’ rights related resolutions. FT reporters in San Francisco explained the extent of Amazon’s activism challenge here.

More battles at Toshiba, where the board has spent much time in recent years dealing with activist investors. A government backed fund, Japan Investment Corporation, is weighing a takeover of the Japanese technology group in what would be the country’s biggest ever PE buyout, and a bid to end a period in which the company was probed over fraudulent accounting.

And executives have not escaped pay scrutiny. Pay-for-performance proposals at Boohoo were found wanting by the world’s largest sovereign wealth fund, Norway’s $1.2trn oil fund, in an attack on what it called “corporate greed” and excessive pay for “mediocre performance”.

The FT’s Cat Rutter Pooley explains why the UK fast-fashion retailer’s plans look like a company with mediocre performance finding a way to hand executives a bigger pay package.

Shareholders are likely to become increasingly restless as global economies continue to slow.

Federal Reserve officials are trying to bring down inflation without causing a recession. As minutes released from the Fed’s early May meeting show, central bankers considered a more hawkish move to “restrictive” policy, with aggressive rises in interest rates. In the event, they agreed to keep increasing the main interest rate by 50 basis points “at the next couple of meetings”. A higher interest rates may risk a strong recovery in the US jobs market.

The US is still grappling with a paucity of workers. Desperate to hire as the US economy rebounds, companies are struggling to find enough qualified people to fill a record number of openings. For every unemployed US worker, there are 1.9 vacancies. This data-led piece explains the extent of the problem in charts.

China, the world’s second-largest economy, is struggling to record positive growth during strict Covid-19 lockdowns to battle Omicron outbreaks. Millions of people in Shanghai have been confined to homes for two months or longer. Premier Li Keqiang this week urged officials to help companies resume production.

Eurozone house prices are set for a correction, according to the ECB.

And In the UK, chancellor Rishi Sunak came under intense pressure to introduce a multibillion-pound emergency rescue package for families struggling with inflation and increased energy costs, in a week in which data showed people on the lowest incomes have been hit harder than others. Energy companies’ shares slid on fears of a windfall tax.

Earlier in the week, the threat of a windfall tax led to confusion, with some energy companies rushing to trumpet their UK investment plans, while others refused to disclose them.

Meanwhile in Davos, it may be spring but the mood is sombre and uncertain.

Inflation, recession and the war in Ukraine have cast a shadow over the gathering of economists at the Swiss ski resort. Rebranding is conspicuous, writes the FT’s Gideon Rachman. What was previously the Russia House, playing host to the country’s corporate and political elite, is now the Russia War Crimes House - taken over by Ukranians highlighting the horrors of invasion.
Responsible Investing (Special report by FT)
Insights in tackling climate crisis (Report by Oxford Said Business School)
Stakeholder capitalism: over 70 companies implement the ESG reporting metrics (Briefing by the World Economic Forum)
Updated international standards on auditing (Briefing by UK’s Financial Reporting Council)
Is your audit committee prepared for an unexpected investigation? (Webcast by PwC)
Shaping global accounting standards (Research insight by LSE)
What boards need to know about artificial intelligence risks

This article is brought to you by FT Specialist’s Agenda, a publication that focuses on corporate boards.
The FT Global Boardroom returns on June 7-9 to debate the most effective strategies for policy-makers, CEOs and investors as the global recovery from the pandemic moves into a new phase. This virtual conference will look closely at the economic, diplomatic and humanitarian impact of the war in Ukraine; explore how business models are adjusting to inflation and the opportunities and challenges from technological innovation. Learn more and register here.

The war in Ukraine has now entered its third month and organisations continue to grapple with the disruption to their businesses. Although primarily a humanitarian crisis, the conflict has accelerated long-term business trends already brought on by the Covid-19 pandemic such as global inflationary pressures and disrupted supply chains. This panel will discuss the business implications of the war in Ukraine. How are organisations navigating this crisis and the high level of uncertainty ahead? Does the war mark the end of globalisation? And will the crisis drastically reshape global supply chains? Learn more and register here.

US and European regulators are tightening up ESG disclosure standards with a move towards stricter compliance and enforcement procedures. The FT in partnership with Gtmhub will host this webinar to assess how to manage ESG compliance risk and provide greater consistency and transparency of ESG data and strategy execution. The discussion will focus on disclosure practices and how technology will play a role in improving standardisation and reporting. Learn more and register for the event on June 16 here.
How do you like the Board Director newsletter?
Let us know by emailing [email protected]

And please forward this newsletter to other board members too.
They can join FT Board Director via