Brewdog in the doghouse over culture

“We did not always get things right.” Those are the words from trendy beer maker Brewdog yesterday after an independent review of the company’s culture following protests earlier in the year. The review followed an open letter published in the summer by former staff accusing management of creating a “toxic” work environment.

The review, in part a mea culpa, says management has moved a “long way” but “highlights the need for us to do more to support our people, to provide career paths and give them the right learning and development opportunities.”

Brewdog and its “punk” approach to brewing have been a sensation with beer lovers. The open letter and culture review have provided a governance wake-up call after a nasty hangover.

JD Wetherspoon joins an exclusive club

Workers also seem to be receiving a boost over at JD Wetherspoon after the pub chain announced it was appointing four worker directors.

Following a consultation the company received more than 100 applicants for the four positions, and appointed the directors this week. They include regional managers Debbie Whittingham and Will Fotheringham, area manager Hudson Simmons, and pub manager Emma Gibson.

Tim Martin, Wetherspoon’s chair, said: “A successful pub company depends primarily on gradual improvements, based on suggestions from employees. Pub and area managers, and other members of pub teams, have always participated in weekly decision-making meetings, which distil suggestions from the ‘front line’.

“The appointment of employee directors will extend this approach to board meetings and will help to preserve the culture of the company for the future.”

Few companies in the FTSE 350 have opted for worker directors under guidelines in the UK Corporate Governance Code, so Wetherspoon will be one of the few. Though, Board Agenda cannot help but note, from personal experience, the true front line in any pub are the bar staff.

New chair for audit watchdog

The UK’s accounting and governance regulator, the Financial Reporting Council, is set to get a new chair in Jan du Plessis, board chair at telecoms giant BT and former chair of mega mining outfit Rio Tinto.

If approved by MPs on the House of Commons business committee (BEIS) du Plessis will be in place to oversee the FRC’s transformation into a brand new organisation, the Audit, Reporting and Governance Authority (Arga).

The reform was proposed as part of a host of initiatives to reform the audit market following the collapse of Carillion in 20218.

Business secretary Kwasi Kwarteng said: “Restoring public confidence in audit and corporate governance will be crucial to our recovery from the pandemic, and I hope to work with Jan towards this goal.”

Climate disclosures are ‘no silver bullet’

Is mandating the use of climate disclosures using Task Force on Climate-related Financial Disclosures (TCFD) guidelines enough? Chancellor Rishi Sunak thinks it’s a good idea. All listed companies and large private companies have to report using TCFD next year. But a team of Oxford professors claim it may not be enough.

They argue for disclosure of asset ownership data that could provide information about a company’s exposure to the physical impact of climate change; mandatory disclosure of scope 3 emissions (indirect emissions in the supply chain); standardisation of transition scenarios for stress tests; and more information about “net zero” pledges.

The three professors—John Armour, Luca Enriques and Thom Wetzer—write: “Even if appropriately implemented through a regulatory architecture that is sufficiently dynamic and adaptive, improved corporate climate disclosures are no silver bullet.

“However, they  may contribute to a learning process that leaves issuers, investors, the market and society at large better attuned to the challenges and opportunities of the net zero transition.” Oxford has spoken.

Expensive errors

Regulatory reporting issues can be costly. This week the Bank of England’s Prudential Regulation Authority (PRA) fined Standard Chartered Bank £46.55m over five reporting errors. One of the errors took four months to report.

Sam Woods, deputy governor for Prudential Regulation and chief executive officer of the PRA, said: “We expect firms to notify us promptly of any material issues with their regulatory reporting, which Standard Chartered failed to do in this case. Standard Chartered’s systems, controls and oversight fell significantly below the standards we expect of a systemically important bank, and this is reflected in the size of the fine in this case.”