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 FT.com/Board.

 
 
 
 
 
 
Each week FT Leader writers meet to discuss the topics and issues to be considered for future FT Leader columns. Three issues are at the top of our agenda:

The Great Resignation – the labour force’s reassessment of pay levels and their work-life balance – has hit a record in the US but is affecting much of the world. Salary levels are spiking. The editorial board’s conclusion: capital has dominated labour for half a century. But the tables are turning. Employers, take note.


Amazon’s idea of using staff as part-time social media ambassadors has been ditched after flopping. The editorial board spelled out our useful lessons for other companies.


As expected the Sue Gray report into Boris Johnson’s government and its “partygate” breaches of Covid lockdown rules was damning - as was the FT’s leader: the editorial board is likely to come back to the broader lessons for leadership.

 
 
 
 
 
 

It was another record-breaking week for inflation as consumer prices in the eurozone increased by 5.1 per cent in January.


The figures added pressure to the ECB to tighten monetary policy. But, when the governing council meets today, most economists expect the central bank to freeze rates while it tapers asset purchasing – in stark contrast to the increasingly hawkish Fed and BoE.


But European markets aren’t convinced. Investors are betting that high inflation will force the ECB into at least two rate rises this year.


Meanwhile, concerns about higher interest rates, growth and geopolitics led the US stock market to its weakest January since the global financial crisis. The S&P 500 index fell 5.3 per cent last month, though it has since rallied, with yesterday marking four days of gains.


In the UK, policymakers at the BoE’s monetary committee meeting today voted to increase interest rates from 0.25 per cent to 0.5 per cent, in the central bank’s first back-to-back rise since 2004.

With even more pressure on household incomes, chancellor Rishi Sunak sought to soften the blow of soaring energy costs and tax rises (due in April) by announcing a support package, including cutting £200 from all energy bills with extra help for the vulnerable.


Indeed, forecasters expect policymakers to raise rates in order to avoid a wage-price spiral, whereby inflation becomes baked in as workers demand more pay to make up for higher living costs, and companies increase prices in response.


Elsewhere, from Vodafone to Unilever, activist investors continue to agitate. Indeed, activists are now on the shareholder register for at least nine businesses in the FTSE 100, attracted by the depressed price of UK-listed companies compared with other markets.


“The UK is a bargain basement right now, compared to the US,” Sarah Ketterer, chief executive of LA-based asset manager Causeway Capital Management, told the FT.


In fact, following a tough 2020, it is Big Oil whose hefty profits have fended off questions about long-term prospects. ExxonMobil and Chevron reported combined net annual profits of nearly $38.6bn in 2021. Both their share prices have also outperformed over the past year, after nearly a decade of poor returns.


Likewise, UK-based oil major Shell also pledged to up its dividend and buy back more shares after a bumper year. Its adjusted earnings for 2021 rose to $19.3bn, up from $4.8bn in 2020 when the pandemic dented demand for oil.


In stark contrast, ESG has also been in the headlines this week. City veteran Sir Ian Cheshire will become the first independent chair of the We Mean Business Coalition, an international non-profit that aims to get private businesses to take action on climate change.


But the Science Based Targets initiative, an oversight group that has become the arbiter of corporate climate action, was rattled as it faces a formal complaint about its governance and possible conflicts of interest.


Workplace culture was also brought into sharp focus. An investigation at miner Rio Tinto discovered that 21 women said they were raped or sexually assaulted at its mines over the past five years, alongside “systemic” bullying and high levels of racism across its operations.


So how can corporate cultures encourage honesty to tackle internal problems?The latest episode of our Working It podcast looks at whistleblowers – including what drives people to speak up and how managers can create environments where workers are able to raise concerns.


And finally, if your board is looking at ethics, you might be interested in the paradox of professionalism. Research shows that the greater a manager’s sense of professionalism, the more likely he or she is to accept a gift or bribe, writes management editor Andrew Hill.


“Deep professionals should embrace continued ethical training, to help embed principles, and embrace an understanding that they may be prone to bribes and influence-seeking,” he advises.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The corporate governance gap (Insights from the Harvard Law School Forum on Corporate Governance)
Audit committee chairs’ views on, and approach to, audit quality (Report from the Financial Reporting Council)
Global manufacturing prospects 2022  (Report from KPMG)
 
 
 
 
 
 
 
 

At last week’s event, Global Economic Outlook 2022, Sir Howard Davies, chairman of Natwest Group, explored the trends that will impact the global economy this year.


How will new variants of Covid-19 impact the global economic recovery? How big is the inflation risk in the short- and medium-term? And how will these challenges affect the prospects for global trade? 


If you weren’t able to join, you can watch the replay here.
 
 
 
 
 
 

The FT Board Director Programme helps participants understand the requirements of the director role and how to carry out their duties successfully – for their own benefit and that of the companies they govern.


You can receive a 10 per cent discount on any of the upcoming workshops below by entering the code FTBD10:


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


The Effective Non-Executive Director | Two-day workshop London | 30 & 31 March 2022


How To Get Your First Non-Executive Director Role | London | 25 May 2022


Board Director Online series | Flexible eLearning courses | 3 month license


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

 
 
 
 
 
 
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 FT.com/boards