Welcome to your corporate governance briefing. After this week, we’ll be taking a short break for August – fear not, normal service will resume on Thursday 7 September.

In the meantime it might be worth holding space in your diary for this autumn’s events (sign up links to come):

• October 18 | Generative AI Join the FT’s artificial intelligence editor Madhumita Murgia and guest to discuss how machine learning will affect your business.
  

• November 29 | Forecasting the world in 2024 FT journalists including foreign editor Alec Russell, economics editor Chris Giles, US financial editor Brooke Masters, and world news editor Alex Barker will share their predictions.

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, and have a lovely summer.

The importance of purpose-led principles

The departure of Dame Alison Rose as chief executive of NatWest is an embarrassment for the bank’s board - which only hours earlier had expressed “full confidence” in her - and for its chair Sir Howard Davies. That is what happens when a company stumbles into a politically tinged controversy and the government, which controls a 39 per cent stake, has a louder voice than other shareholders.

Rose was right to step down over the damaging dossier prepared by subsidiary Coutts on Nigel Farage, one-time Brexit cheerleader. His account was closed, partly on political grounds. But legally held political views should be no bar to banking services and Coutts should not have debanked him on the basis of its investigation. Rose should have known the full story before discussing it, which opened her to accusations that she breached client confidentiality.

There is, however, a danger of throwing the baby out with the Rose-water. The chief executive was a good leader operationally, and also a “good” leader, who reignited NatWest’s purpose. Now critics are able to wade in and claim that what she calls a “serious error of judgment” was the fault of “woke capitalism” gone mad.

“The Coutts scandal exposes the sinister nature of much of the Diversity, Equity & Inclusion industry,“ UK home secretary Suella Braverman tweeted before Rose quit. “Apparently anyone who wants to control our borders & stop the boats can be branded ‘xenophobic’ & have their bank account closed in the name of ‘inclusivity’.”

The problem, though, may be too little DE&I, not too much. If Rose and the Coutts executives had actually applied evenly the tenets of inclusivity and fairness that she spread during her tenure at the bank, and subjected the Farage dossier to appropriate challenge internally, they might have come to a different decision. The Farage/Coutts case ought to become a study in the need to apply purpose-led principles to everyone, even customers and colleagues whose views conflict with the consensus.

Chart of the week

This week I took a deep dive into productivity – and why British workers are less productive per hour worked compared with peers in other advanced economies such as the US, Germany and France.

Various factors are creating a drag – including structural forces, political instability and a relative lack of business investment.

Indeed, a recent report from the Resolution Foundation noted: “If UK business investment had matched the average of France, Germany and the US since 2008 . . . our GDP would be nearly 4 per cent higher today, enough to raise average wages by around £1,250 a year.”

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My top FT picks

Twitter/X: maverick rebrand leaves Musk with a cross to bear Strategy: Meta’s new name demonstrated chief executive Mark Zuckerberg’s power. Twitter’s rebrand does the same for Musk, our Lex writers note Annual reports are fast becoming political treatises Reporting: Some recent reports have abandoned the usual corporate diplomacy. Experts suggest the documents are changing as companies feel more pressure to take a stand EY hires corporate crisis adviser to examine failed break-up plan Post-mortem: The failed split has already led the firm’s global boss Carmine Di Sibio to announce his departure next year – now Lord David Gold will also review Project Everest’s planning and processes Chevron waives retirement age for chief and reports strong oil earnings Succession: Mike Wirth, who turns 63 later this year, will head up the supermajor for the foreseeable. “This provides continuity and flexibility of the executive team,” he said.

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Best from elsewhere

1. Greenwashing: navigating the risk | Harvard Law School Forum on Corporate Governance Greenwashing poses three main risks to companies – reputation, regulation and litigation, the authors argue. They explore these risks in depth and offer advice on how to mitigate them including training staff and avoiding jargon in disclosures.

2. Global CEO turnover index | Russell Reynolds The latest tranche of data was published this week. The findings are interesting. For example, more women are taking the top spot than ever before, yet they account for just 13 per cent of all new CEOs so far this year (though that varies by country). Succession planning is going well, however – 77 per cent of new CEOs were internal candidates.

3. Engineers: the boardroom’s missing link? | Directors & Boards Just 39 per cent of Fortune 100 companies have one or fewer engineers on their boards, the authors note; 14 per cent have none at all. “Some might argue that their firm is not in the technology business,” they reason, “but the reality is that today every firm is in the technology business.”

From FT Specialist’s Agenda

Board effectiveness: why directors and executives must work together
Recent research suggests there is a disconnect between how boards perceive their performance versus how well executives think they are doing.

Any other business

Deutsche Bank’s head of retail banking in Germany reflects on a monumental IT integration effort at the bank. For 13 years, Deutsche had operated two platforms: one for its own retail business and another for its Postbank brand. That was until the first weekend in July this year.

Have words of wisdom to share? Email me.