Welcome to your weekly corporate governance briefing – covering everything from the fate of the CBI to the future of golf. Before I get stuck in, there’s one member event left before the summer break so be sure to add it to your calendar: And don’t forget to get in touch about our AOB section. Overheard any nuggets of wisdom or wit in the boardroom that you might like to share? Email me your offering and I will consider it for inclusion (anonymised where appropriate, of course). As always, the latest stories and resources are on ft.com/board-network-members. If you have any membership queries, email [email protected]. Feel free to forward this newsletter to other directors. They can join FT Board Network via ft.com/board-network. Thanks for reading. If not the CBI, then who?
The CBI business lobby group won a crunch vote of confidence on Tuesday. © Peter Macdiarmid/Getty Images If you had told me a year ago that the FT would be reporting about existential threats to the Confederation of British Industry (CBI), I would have scoffed. The business lobby group, founded in 1965, seemed to be part of the industrial-political wallpaper. But despite this week’s vote of support for the group and its efforts to restore its ethical foundations, recent scandals have damaged the CBI’s reputation. The controversy has also raised the question of whether, if such organisations did not already exist, we would want to invent them. Every developed country has its equivalent of the CBI, and most have several. The US boasts the Business Roundtable and the US Chamber of Commerce, for instance. These groups’ powers vary enormously. Japan’s highly influential Keidanren plays a role in annual wage negotiating rounds between companies and unions. Italy’s Confindustria controls the country’s equivalent of the FT, Il Sole 24 Ore. Prior to the latest scandals, the main concern about the CBI had centred not on its excessive influence but on the fraying of its ties with the UK government. It was only just starting to restore relations that were badly dented by previous CBI leaders’ vocal opposition to Brexit when the government suspended contact. When I asked one UK chief executive if the CBI was still fit for purpose, he pointed out that he and his board naturally relied on in-house advice and support about forthcoming legislation and regulation affecting its core activities. But on overarching topics, such as changes to broad corporate legislation, he was more than happy to delegate responsibility to the CBI’s experts, who could mount centralised campaigns on behalf of all business. Some would not be sad to see the CBI disappear. Others say businesses can and should take care of their own lobbying. I still see a strong need for a leading voice for business with CBI-like convening power. Now the CBI has an opportunity that other countries’ deeply embedded business organisations are unlikely to have: a chance to streamline, sharpen up, and become more effective. But if the CBI can’t restore trust, British business needs to find another authoritative mouthpiece – and fast. Chart of the week“I think we’re entering . . . a golden moment for climate litigation,” says Jolyon Maugham, founder of the non-profit Good Law Project. The costs of bringing such cases are often met by charities, philanthropic groups or crowdfunding. But the growing interest in compensation cases, and new regulatory scrutiny of greenwashing, has led some to see a business opportunity. Professional litigation funders, backed by investors ranging from pension funds to family offices, sense there is money to be made. Climate-related disputes are heading for the courtsCases relating to environmental and climate issues
| Ivan Menezes, businessman, 1959-2023 | Leadership: Chief executive Menezes, who overhauled Diageo, championing premium brands, acquisitions and D&I, will be sorely missed. Debra Crew – already named as his successor – will assume the role early | | | ‘Pirelli is in peril’: Pressure rises over Chinese grip on Italian tyremaker | Geopolitics: In a controversial move, the Italian government is assessing if Pirelli’s technology has national security implications, and whether to curb Sinochem’s voting rights or force a sell down | | | How golf’s warring factions finally swung a peace deal | M&A: This was an entente that no one saw coming as the two sides had divided the men’s game. It also highlights how Saudi Arabia has used its deep pockets to enter the world of global sports | | | | | | Best from elsewhereAnti-ESG shareholder proposals in 2023 | Harvard Law School Forum on Corporate Governance This is a deep-dive into anti-ESG proponents – the issues they raise, the support they get and who they are. Some insights are astonishing: Inspire Investing supports those who are interested in “biblical investing”. Its Christian advisors “help you glorify God in your financial life”. Corporate governance and investor stewardship – are we losing the plot? | Equiniti An insightful essay from governance expert Guy Jubb. He sets out some of the challenges facing corporate governance in the UK. Possible solutions include refreshing the Companies Act and establishing an independent Corporate Governance and Stewardship Commission. Shareholder engagement inside and outside the shareholder meeting | European Corporate Governance Institute This paper explores the main ways public companies engage with shareholders. Findings include that the shareholder meeting remains important. “Its formal, in-person and public nature sets it apart from other mechanisms and gives it unique potential as a forum for scrutiny and accountability.”
From FT Specialist’s AgendaCompanies turn to investors after burning through equity reserves Experts suggest the war for talent, geopolitics and declining stock prices have all contributed to increasing the burden on companies’ share pools AOBWhile economists predict generative AI will eventually boost productivity, Stanford professor Nick Bloom was cautious about how quickly we will see the benefits. Have words of wisdom to share? Email me. |