Brexit could boost European voices on UK boards — Europe

European voices are to become an increasingly important part of UK boards post-Brexit and, therefore, an attractive recruitment proposition. Writing in a report by Odgers Berndtson, Brexit, Business Leaders and Investment, Virginia Bottomley sets out how the UK has already made great progress in diversifying its boards across a number of different measures, including internationalism.

The report stated that 40% of the top-quoted UK companies are led by individuals who originate from outside the country. However, maintaining strong ties with Europe post-Brexit is likely to increase demand for EU executives on UK boards.

“Before Brexit, it was common to believe that the EU could largely be covered from London,” said Bottomley.   “The future will see businesses challenging that assumption.”

Private companies handed new governance code — UK

New corporate governance principles for large private companies have been published, including a call on boards to undertake “meaningful engagement” with material stakeholders. The six new principles are the result of a review undertaken by James Wates, chairman of construction company Wates. The review was ordered by the government in the wake of scandals such as the collapse of high-street retailer BHS.

In a statement, Wates said: “These principles will provide a flexible tool for companies of all sizes, not just those captured by the new legislative reporting requirement, to understand good practice in corporate governance and, crucially, adopt that good practice widely. The principles are about fundamental aspects of business leadership and performance.”

French business groups adopt revised code — France

French entrepreneur associations Medef and Afep have introduced an updated corporate governance code for their members that is tougher than originally envisaged, after public criticism of sizeable “golden parachutes” received by outgoing executives
Medef and Afep (Association française des entreprises privées) brought forward the plan, noting that they were “anxious to participate in a constructive manner in the debate on the missions of companies and the public interest”.

This step is part of a process of constant evolution of the norms of corporate governance which are revised every two years, allowing the French corporate governance code to be one of the most discerning at the international level,” said the associations.

The new code is the result of a public consultation launched in February. Since then, there has been public outcry about the €13.2m received by Georges Plassat, who retired recently as chief executive of Carrefour, while his successor, Alexandre Bompard, executed Plassat’s plan to cut jobs.

Investors urge worker representation — UK

Stronger representation of the workforce on the UK’s major company boards is one of the key highlights of the reconstituted corporate governance code, according to commentators.

The code sets out a number of changes, including a nine-year chair term unless explained otherwise; stronger consideration of the workforce at board level; and “comply or explain” on holding shares for at least five years if awarded as a bonus.

While workforce engagement is now an integral part of boards’ responsibilities under the new code, it doesn’t prescribe a single action. Instead, it suggests that one or a combination of methods should be utilised, including: a workforce-appointed director;
a formal workplace advisory panel; and a designated non-executive director.