Hello and welcome to your Board Director briefing from the Financial Times.

This is the last week of our pilot project, and we have covered plenty of ground. Alongside sending you the latest news, trends and debates, we have held events on the UK’s proposed corporate governance reforms and a peer-to-peer workshop.

We hope you have enjoyed the project. Later this week we will send you a survey to ask for your views on FT Board Director – if you have five minutes, we would love to hear your thoughts and what might be helpful to you in future.

As always, you can email your suggestions for stories and resources to  [email protected].
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, three issues dominated:
While US President Joe Biden was “satisfied” with the outcome of the G7 summit last week, he pushed G7 leaders to use their financial clout to counter China’s rising global influence and declared that western democracies were “in a contest with autocrats”.

European leaders were more cautious about antagonising Beijing at the summit, but news of the EU and US ending a 17-year trade dispute over subsidies for Airbus and Boeing is evidence of a concrete steps forward for the western allies.

Yet there is doubt over whether the G7’s delivery will match its rhetoric, writes chief foreign affairs commentator Gideon Rachman. Russian president Vladimir Putin and China’s president Xi Jinping will note that the alliance has changed, but they will not be intimidated yet, he notes.

Elsewhere, in its meeting this week, the Federal Reserve is set to discuss tapering its asset purchase scheme as it looks to reduce the monetary stimulus it rolled out during the pandemic.

This is also a test of the Fed’s narrative on inflation being transitory, writes Mohamed El-Erian, president of Queen’s College, Cambridge university – and will have implications for the central bank’s policy credibility, economic reforms in the US and global financial stability.

Meanwhile the UK’s inflation jumped to 2.1 per cent last month, exceeding the Bank of England’s target as the gradual easing of lockdown drove up prices.

But the delayed end to restrictions has left many businesses closed or operating with restricted capacity. And with the Treasury making it clear that it will not increase the existing support package, businesses warned that the government risks “falling at the final hurdle”.

Post-Covid labour shortages have been another source of concern. But it is too soon to worry, writes employment columnist Sarah O’Connor. The scramble for chefs and other workers could relax as the economy settles and the pandemic recedes, she notes.

International relations fared better, however, as the UK and Australian governments agreed a trade deal. Alongside making it easier for Britons to work and travel to Australia, the deal will eliminate tariffs on goods with a 15-year transition period and quotas.

On to corporate governance and Paul Boyle, former chief executive of the Financial Reporting Council, has warned that the government’s plan to reform the audit market is likely to fail. The proposals increase costs for companies without fully tackling competition among the Big Four, he argues.

And last week the damning findings of an independent probe into Toshiba’s 2020 AGM were published. The report describes how senior figures at Japan’s Ministry of Economy, Trade and Industry collaborated with Toshiba’s senior management to prevent executives being voted out.

The report could become a catalyst for change in corporate Japan, writes Asia business editor Leo Lewis. And chief business commentator Brooke Masters calls for revolution: Toshiba’s shareholders should vote down the entire board, she argues.
This week Patrick Dunne, author of Boards, chair of Education Sub-Saharan Africa and core faculty member of the FT Board Director Programme, shares his reading list:

Getting Resilience Right
If you have moved from a “just in time" to a "just in case" mindset, this analysis from Bain might be "just for you". It unpicks some myths around resilience, most notably that past resilience might guarantee future resilience. It also concludes that while high risk can generate high rewards, more resilient companies have nearly double the survival rate over the long run.

Disabled people in leadership positions
I was delighted to see this report on disability in the FTSE100. Yet, sadly not surprised to read that according to 2020 annual reports, there are no executives or senior managers who have disclosed a disability at any of the FTSE100 companies. Why has it taken us so long to even get the data and more importantly what are we going to do about this?

At a time when many of us are reflecting on the decisions taken during the pandemic, this book from decision gurus Daniel Kahneman, Olivier Sibony and Cass Sunstein is supremely well timed and thought provoking. Understanding noise, improving judgement and understanding the costs of noise reduction turns out to be really interesting and, if you will forgive the pun, far from baffling.
Today, the UK’s government’s environmental adviser  accused ministers of failing to plan for the “inevitable” impact of climate change, despite its repeated warnings.

Interestingly, this follows last week’s FT analysis which shows that trillions of dollars of economic activity along China’s east coast is at risk of rising sea levels.

There can be no such behaviour in business, however. Markets are increasingly willing to punish companies who mismanage global warming risk, writes global business columnist Rana Foroohar.

For those looking for more information on climate risk, Chapter Zero published guidance for non-executive directors last year.

There is also an interesting working paper from the European Corporate Governance Institute that explores the effects of mandatory ESG disclosure.
Board directors: ever so slightly more diverse (Feature from the FT)
Missing Pieces Report: The Board Diversity Census of Women and Minorities on Fortune 500 Boards (Report from the Alliance for Board Diversity and Deloitte)
The macroeconomic damage from gender discrimination (Feature from the LSE Business Review)
How to best use data to meet DE&I goals (Practical insights from Harvard Business review)
Thematic review: interim reporting (Insights from the Financial Reporting Council)
Internal audit – a view from the board (Discussion from the Risk Coalition)
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Through a series of workshops, events and formal courses, the FT Board Director Programme provides participants with knowledge of the specific requirements of the role and assists them to carry out their duties successfully for their own benefit and to increase long-term value for the companies whose boards they sit on.

Upcoming courses include:

The Effective Non-Executive Director | 13 & 14 July | Virtual workshop
Board Director Online series | eLearning courses | 3 month license

Receive a 10% discount on any of the workshops by entering the code FTBD10

To discuss your individual or organisational needs please contact the team: [email protected]
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