A recent information about the intentions of the UK to amend its corporate governance code and modernize it. This is a report form the FT NED club and program.
I would like to add to the video below that in my eyes, the Board is not a part of the company, it is an isolated supervising board on top of the management. It deals with policies and supervision, rather than management, which is being done at the management level.
Nevertheless, the FT NED club and program is a pioneer in the field of corporate governance and none executive directors education, and as one who graduated the first class, I must say that the initiative is blessed and the NED education is both essential and rewarding in a post 2008 governance world.
The following is extracted from the FT None Exec club newsletter:
FT NED Club Editorial July 2017
A new approach to corporate governance?
Despite the much trumpeted campaign to curb boardroom excess and rebuild trust in UK plc, leading to the publication of the Green Paper on corporate governance at the end of last year, the chances of any legislative changes look to be unlikely. With the Government's reduced majority since the snap election, a legislative programme dominated by the complexities of BREXIT and no mention of governance in the Queen's Speech, it seems most likely that the spotlight will fall on the Financial Reporting Council (FRC) to use its softer powers to encourage reform.
This was the view of Paul George, Executive Director of the Corporate Governance and Reporting Division of the FRC which he shared with the delegates of ICSA: The Governance Institute's annual conference held in London earlier this month. In the opening panel session, Paul discussed the future of corporate governance with Chris Hodge, previously Director of Corporate Governance at the FRC, now Policy Advisor to the ICSA, and Kerrie Waring, Executive Director of the International Corporate Governance Network.
There was general agreement that, although the current UK Code is still workable, since its publication in December 1992 it has been added to and amended with provisions which, at the time, were rational, reasonable and pragmatic in the light of changing circumstances and challenges but that it now needs a thorough overhaul.
The FRC are therefore launching a major consultation in the autumn, most likely November 2017. They will be looking to shorten and sharpen the Code and to make it more output focussed. The feeling is that at the moment it is too focussed on risk management and doesn't take into account enough the entrepreneurial nature of boards. It also needs to get back to the concept of broad principles rather than specific provisions. By their nature principles are more challenging and provisions are easier to prove compliance with, but there was a feeling that this has led to more of a box-ticking culture. The idea is to seek to increase the board's responsibilities in relation to the integrity of the board, the culture of the organisation and broader stakeholder representation.
A day in Gibraltar
Last month the FT Non-Executive Directors' Club teamed up with the Gibraltar office of our partners EY to put on a breakfast seminar for a specially invited audience, led by leading speaker and non-executive director expert, Murray Steele. EY Gibraltar Managing Partner Jose Julio Pisharello, who also happens to be a graduate of the Financial Times Non-Executive Director Diploma, spearheaded the event which was covered the same evening on Gibraltar TV News. Watch the video clip of the coverage below: