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

Before the summer lull arrives, we wanted to send another briefing to help ensure you are up to speed on macro trends and corporate governance news.

We have rounded up some essential news stories, alongside a helpful reading list and useful resources to support your work in the boardroom.

We hope you enjoy it and, as always, you can email your suggestions for stories and resources to [email protected].
Each day FT Leader writers meet to discuss the topics and issues to be considered for future FT Leader columns. In this week’s planning meeting, three issues dominated:
Global relations were tense this week as the US – backed by allies, including those in Europe and Nato – accused the Chinese government of working with criminal gangs to launch global cyber attacks.

Chinese diplomats in the EU, UK, Norway and New Zealand soon hit back, calling the accusations “groundless” and a “malicious smear”.

Global markets had a similarly shaky start to the week, fueled by concerns about the Delta variant. On Monday, the FTSE 100 dropped 2.3 per cent, European bourses had their worst session of the year and US stocks were down 1.6 per cent.

Indeed, there are reasons to question the global economic boom that economists have been expecting as a result of post-lockdown reopenings, argues Ruchir Sharma, chief global strategist at Morgan Stanley Investment Management. China and the US drive growth, “but cracks are appearing in their economic engines,” he writes.

The Delta variant is also playing on the minds of UK central bankers. On Monday, Professor Jonathan Haskel, a member of the Bank of England’s rate-setting committee, told a webinar that it is too early to tighten monetary policy.

“The economy is not fully recovered yet and faces two headwinds over the coming months: the highly transmissible Delta [coronavirus] variant and a tightening of the fiscal stance,” he said.

And while global business columnist Rana Foroohar says that worries about post-pandemic inflation are “premature”, there are other significant factors affecting inflation that we are not discussing enough – including tech, demographic changes, and their effect on real estate.

Meanwhile UK businesses face more immediate concerns, including staff shortages driven by the “pingdemic”. Prime minister Boris Johnson resisted calls late last week to bring forward the date when fully vaccinated workers no longer need to self-isolate.

Since then, he has exempted key workers with two jabs, but there is confusion over self-isolation advice and which people can keep working if pinged.

Brexit remains troublesome too. The UK will put itself on a collision course with the EU today by unveiling new demands that would overhaul trading arrangements between Great Britain and Northern Ireland.

Elsewhere, directors will want to take note of plans to strengthen powers for the Competition and Markets Authority. The draft rules include heavy sanctions for corporate wrongdoing and direct fines.

There is also a lesson to be learned in Philip Morris International’s deal to buy inhaler company Vectura. “When your purpose guides you on to a path that many onlookers rank somewhere between bizarre and totally unacceptable, something has gone rather wrong,” writes business columnist Helen Thomas.
This week Bryan Foss, co-founder and director of the Risk Coalition, shares his reading list:

A Risk Management Book Unlike all the Others
Risk management is not all downsides – it is about achieving the objectives you commit to and remaining accountable for the results. This book, written by risk consultant Clive Martin, makes risk management accessible, rather than purely technical, by relating the topic back to real-life situations (including bumping into Kylie Minogue).

Culture Audit in Financial Services
What is the culture in your organisation? Unless your attention to culture is sufficient to influence the right outcomes, you can probably bet that people will not do as expected, especially when you are not able to oversee them directly. This compendium of culture tips provides a toolkit to achieve the best culture for teams and boards – perhaps even in financial services regulators if you operate there.

Dilemmas, Dilemmas II: More Practical Case Studies for Company Directors
It is often said that only the very hard questions end up in the boardroom – all the others get answered on the way. Directors make tough decisions all the time and this book, written by ​​Julie Garland McLellan, accelerates the development of the personal skills needed to help directors make workable and well-reasoned judgments in the boardroom.
The Financial Reporting Council (FRC) is in the midst of a governance crisis.

The UK’s accounting regulator has been without a permanent chair since May last year. As yet, there is no successor and the interim chair, Keith Skeoch, is due to step down in October.

The situation has drawn the ire of Sir John Kingman. In a letter to the Financial Times, he wrote: “This is no way to govern, let alone strengthen, a major regulator whose work is fundamental to trust in companies, accounts and the working of markets.”

If this has got you thinking about board succession planning, last year PwC and recruiters Spencer Stuart published a useful guide. Executive recruiter Odgers and Berndston has also shared its tips and insights.
US needs Japan and Korea to counter China tech, says Google ex-CEO (News from the FT)
Questions for boards to ask about cyber security (Practical insights from the National Cyber Security Centre)
Women directors and E&S performance: Evidence from board gender quotas (research from The European Corporate Governance Institute)
Beyond the c-suite: Trends in director skill sets (Research from the Diligent Institute)
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