Hello and welcome to your Board Director briefing from the Financial Times. As guest editor this week, I will share the latest news, trends and debates affecting business and corporate governance.

You will also find my pick of this week’s FT stories, helpful resources from around the web, and training opportunities.

I hope you enjoy it. If you have read a story that you think we should include – or a resource that you have found particularly helpful – please do share your ideas by emailing  boarddirector@FT.com.
 
 
 
 
 
 
Each day FT Leader writers on the Editorial Board meet to discuss the topics and issues to be considered for FT Leader columns. In this week’s planning meeting for the week ahead, three issues dominated:
 
   
   
   
 
 
 
 
 
 
The governor of France’s central bank, François Villeroy de Galhau, has said that a global agreement requiring all listed companies to disclose their climate change risks in a standardised way is close and could be agreed at the UN COP26 conference in November.

This follows a momentous week for energy companies and ESG. ExxonMobil’s shareholders voted to overhaul its board – giving the new directors a mandate to push the oil giant much harder on its strategy to reduce emissions.

On the very same day, a verdict from The Hague ordered Royal Dutch Shell to cut carbon dioxide emissions more, and faster, than planned. And the management at Chevron also had its hand forced on climate issues by investors.

These actions mark a “sea change” in the climate battle, our reporters note, and will have far-reaching consequences.

Indeed, what happened at the oil companies “ should act as a wake-up call for other executives with a bunker mentality,” writes chair of the US editorial board and editor-at-large Gillian Tett – they can no longer afford to ignore activists.

Looking more broadly, economics editor Chris Giles asks if the world is entering an inflationary era in his Big Read. While central banks are confident that any inflation will be transitory, there is a chance that, for the first time in decades, price rises will be more than a flash in the pan.

One further problem is that consensus on how to promote stable price growth amongst monetary authorities across the world has broken down. Central banks in the US, Europe and Japan, for example, are pursuing different strategies.

Indeed, the European Central Bank faces difficult decisions when its governing council meets next week. Figures show inflation in the eurozone rose to 2 per cent in May – up from 1.6 per cent in April. It is the first time it has exceeded the ECB’s target in over two years.

But amid the concern, there was a note of positivity from the OECD. It predicted that global output would rise 5.8 per cent this year, an upgrade on previous forecasts. And growth of 4.4 per cent the following year would bring most of the world back to pre-pandemic levels of activity.

There was less optimism around the UK economy, however. The country faces a decisive decade, writes chief economics commentator Martin Wolf. It must tackle many difficult challenges from a base of stagnant productivity, high inequality, rapid ageing and high debt.

Brexit is already beginning to bite too. UK services exports from 2016 to 2019 were cumulatively £113bn lower than they would have been had the UK not voted to leave the EU, new research shows.

And finally, directors looking for a case study on strategy could turn to AstraZeneca. Its vaccine, once seen as a silver bullet in the fight against Covid-19 and a springboard into a new market for the company, is now facing an uncertain future due to a huge lawsuit and rare side effects.
 
 
 
 
 
 
This week Sarah Gordon, chief executive of the Impact Investing Institute, shares her reading list:

The economics of biodiversity – how can we save our planet
The world needs fundamentally to rethink how society measures economic success if we want to address the rapid decline of animal and plant life that threatens our planet and our own existence. Our demands on nature by far exceed its capacity to supply them. We need to create sustainable economies that help us restore our planet’s biodiversity now.

Helping purpose-driven business thrive
A new report by ReGenerateTrust recommends providing global leadership on impact measurement to make it easier to report and understand a company’s impact on society, create a clear, obvious legal framework, and turbo-charge support for companies that tackle the challenges we face, such as the Covid-19 recovery, reaching net-zero and levelling up the UK.

A ‘wildlife bond’ to save rhinos
Keeping up with the latest trends in the bond market is not always easy, what with “green bonds”, “social bonds” and “transition bonds” to name only a few. The World Bank’s first “wildlife bond” seeks to save the endangered black rhinoceros population in South Africa by rewarding investors if the number of rhinos increases over the next five years. It is the definition of "win win".
 
 
 
 
 
 
 
The upheaval in ExxonMobil and Chevron’s boardrooms coincided with “Big Tech’s parody of boardroom accountability”, writes west coast editor Richard Waters.

Special voting rights allow companies like Facebook and Alphabet to swat away shareholder proposals, he explains. But dissatisfaction is now ratcheting up and the drumbeat of unrest will only get louder.

For those interested in shareholder activism, PwC has published a director’s guide which includes trends, tactics, risks and responses.

EY also has advice for boards, including how they support management to prepare for and respond to shareholder activists.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Your CEO succession plan can not wait (Research and insights from the Harvard Business Review)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ransomware: prevention and response (Practical insights from Clifford Chance)
 
 
 
 
 
 
 
 
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