There is plenty to tuck into in this week’s board briefing so I’ll hop straight in. First, a couple of exclusive member events to add to your diary: June 6, Virtual | Cyber attacks: how prepared is your business? Join experts including Ciaran Martin, founding chief executive of the National Cyber Security Centre and professor at the University of Oxford. RSVP here. June 14, Virtual | Silo-busters. This peer-to-peer workshop is a chance to learn from each other and share practical ideas on how to build teams that contribute to strong organisational cultures. Sign up here.
Overheard any nuggets of wisdom or wit in the boardroom that you might like to share in our AOB section? I am always on the lookout for insights — email me your offering and I will consider it for inclusion (anonymised where appropriate, of course). And 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. From cyber security to resilience
© FT Montage/Getty/Dreamstime Chief executives and boards of directors don’t need anyone to tell them that cyber security is important. Even in 2017, when I first wrote about the issue, a big company such as Volkswagen was warning that it faced 6,000 attacks a week. Since then, the emphasis has shifted from the almost impossible task of ensuring complete cyber security to cyber resilience. The technicalities of defence and response are still in the hands of the chief information security officer and his or her team. But, as I found in preparing a new analysis of the state of play, the question of how to see off attacks, and bounce back from them, should be firmly on the boardroom table, for four main reasons. First, and most mundanely, that is where regulators want it to be. From the Securities and Exchange Commission to the European Central Bank, watchdogs have intensified their focus on cyber resilience, and on how well-prepared directors are to respond to cyber attacks. Second, cyber resilience is a high-level risk management challenge. Chief executives and directors are in the right place to identify the core activities that, if compromised, would undermine the company, and to respond to the reputational risk. Third, the decision on how much information to share with competitors, suppliers, customers and regulators can only be taken at executive or board level. All the experts I consulted agree that it is important not to suffer in silence when subject to an attack. Finally, the CEO and directors are best-placed to exploit the opportunities in preparing for an inevitable attack — for instance, streamlining processes or reorganising supply networks — or in recovering from one. Complacency is still, perhaps, the greatest risk. Researchers from Oxford university and cyber risk management company Istari, call this the “preparedness paradox”. They found that companies that said they were best placed to withstand a cyber attack were less likely to be ready and most leaders who had already been attacked were able to build back better. Chart of the weekOffice attendance in London is at about 60 per cent of pre-pandemic levels, according to a report about the effects of homeworking by the Centre for Cities. While many employees might enjoy hybrid working, the think-tank has warned that it could have a negative impact on London’s position as a hub of creativity and productivity. | Economist Daniel Chandler: ‘Shareholders have all the power. It doesn’t have to be that way.’ | People: The author of ‘Free and Equal’ makes his case for empowering the workforce, including having all UK businesses allocate half of their board seats to worker representatives | | | How Japan got its swagger back | Markets: Japan’s sun is rising thanks to myriad factors including geopolitics, inflation and drives to improve governance, corporate value and shareholder engagement. But can the rally last? | | | Dividends from largest companies hit record $326bn in first quarter | Shareholders: Investors will be pleased to hear that payouts are expected to hit $1.64tn in 2023 — no mean feat given the economic uncertainty of last year | | | Allen & Overy closes in on American dream with $3.4bn Shearman deal | M&A: The transatlantic union would create a legal giant with almost 4,000 lawyers across the world — but history shows that the cultural aspect of integration can be tricky | | | | Best from elsewhereUnlocking the investment potential of S in ESG | Harvard Law School Forum on Corporate Governance Investors are struggling to develop “robust processes for addressing social factors” due to a lack of good quality data. But data science and quantitative analysis can help, as can developing a research framework to identify risks and opportunities. What every CEO should know about generative AI | McKinsey There is plenty of hype around AI — but this article is helpfully bedded in practice. It includes an overview of the tech, examples of its use in a range of settings (from software engineers to banks), and lessons for chief execs. UK Corporate Governance Code consultation document | Financial Reporting Council The focus is mainly on “internal control, assurance, and resilience” and proposals include to “improve transparency” about clawbacks for directors’ pay. There is more coverage here too.
From FT Specialist’s AgendaESG backlash fails to shake up proxy season AOBIt was a rare mea culpa moment as activist investor Carl Icahn admitted he was wrong to bet on the market crashing. Have words of wisdom to share? Email me. |