Hello and welcome to our latest intelligence briefing for boards.

Every week, we will put together a newsletter to 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 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.
Each day FT Leader writers on the Editorial Board meet to discuss the topics and issues to be considered for FT Leader columns. Here are some of the issues that have dominated this week:

The use and alleged abuse of power has been a theme for the official house line on a range of micro and macro stories.

We’ve been critical of J&J’s decision to deploy a so-called Texas Two-Step corporate restructuring and use (or abuse?) Chapter 11 bankruptcy protection to limit compensation claims over its sales of talc.

Similarly, S&P’s stock market indices have come under scrutiny over allegations of conflicts of interest with debt rating clients: more transparency is crucial, the Editorial Board argued.

Also in the works is a tough line on China’s “hypersonic weapon” trials, which the FT revealed had taken place over the summer.

There was a flash of good news this week as Singapore launched quarantine-free travel plans for vaccinated people with 10 countries including the UK, US and Canada.

But as the city-state changes tack, China’s president Xi Jinping holds firm. Despite weak economic performance in the third quarter, Xi is pursuing policies that prioritise longer-term structural changes over short-term growth.

Change was afoot at Bundesbank as its head Jens Weidmann, who was a vocal critic of the European Central Bank’s ultra-loose monetary policy, decided to step down

Indeed, the choice of his successor will send an interesting early signal about the balance of power between the three parties trying to form a new coalition government in Berlin.

Weidmann may have felt less lonely among UK central bankers, however, who look to be turning more hawkish.

Although inflation dipped slightly to 3.1 per cent in September in the UK, it is likely to be temporary as food and energy prices rise. There is more evidence that labour shortages are fuelling wage growth too. A survey has found UK employers expect to hand out bigger pay rises next year to retain staff.

Indeed, last Sunday, Bank of England governor, Andrew Bailey, warned that it “will have to act” to curb inflationary pressure. That was enough for traders to bet the BoE will increase interest rates as soon as November, sparking a sell-off on Monday in short-dated UK government debt.

There could be further surprises ahead too. If rates rise to 0.5 per cent, this is the level at which the BoE plans to begin the process of reversing quantitative easing – and bonds worth £28bn fall due on March 7.

Continued supply woes will do nothing to help inflationary pressure either. On Tuesday, business leaders warned MPs that the UK’s supply chain crisis will continue into 2023 and beyond.

There was a similar message from Ngozi Okonjo-Iweala, head of the World Trade Organization, who told the FT Africa Summit that she expects global supply chain difficulties to last several months.

Into politics and British businesses will be eagerly awaiting next week’s Budget. Chancellor Rishi Sunak was given an early boost as figures show public borrowing fell by more than expected in September.

It was good news for banks too as Sunak will cut the tax surcharge on their profits from 8 per cent to 3 per cent to keep the City of London competitive.

But elsewhere the government warned that new taxes are likely for UK households and businesses in the coming years to meet the costs of hitting the 2050 net zero target.

And finally, THG was trying to restore investor confidence this week, announcing it would abolish the “special share” rights held by co-founder and chief executive Matthew Moulding by the end of 2022.

“Fair enough, THG is trying to show willingness in addressing City concerns,” writes business columnist Helen Thomas.

“...But the motivation is an absence of other near-term options, rather than a sudden conversion to the merits of proper oversight and governance,” she adds.


This week we’re looking ahead to the UN Climate Change Conference, which kicks off in Glasgow next Sunday.

“COP26 may be the last chance to put humanity on the path to net zero by 2050,” writes chief economics commentator Martin Wolf. “If governments do not take that chance now, the shift will probably not happen with the needed scale and speed.”

From emissions targets to phasing out coal, this video outlines the challenges facing government negotiators.

Chapter Zero has a blog on what non-executive directors should look out for from COP26. And the first part of EY’s recent report, Soaring to new heights, includes insights on ESG.

Don’t forget, there are plenty more resources on our online hub FT.com/Board.

When transformation is essential, how can strategy be differential? (Insights from EY)

The Bank of England’s response to rising inflation (Blog from LSE Business Review)

The governance of corporate purpose (Working paper by Colin Mayer for the The European Corporate Governance Institute) (Analysis by the FT)
Cybersecurity board toolkit (Practical insights from the National Cyber Security Centre)
A hacker warns: Give up trying to keep me out — and focus on your data (Opinion from the FT)
Why you should hire a chief AI ethics officer (Insights from World Economic Forum)

Today we are hosting a virtual event Net positive: how courageous companies thrive by giving more than they take.

Paul Polman, co-founder and chair of IMAGINE, will discuss the challenges boards face in dealing with ESG and how business leaders can harness their power to deliver meaningful change in the world.

Join the conversation today at 17:00 BST. Register now.

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So You Want To Be a Non-Executive Director? | Virtual workshop | 16 March 2022

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