Comply or complain

The UK Corporate Governance Code appears unpopular, according to research out this week. A Thomson Reuters survey found six out of ten FTSE 350 companies are not fully compliant with the code.

According to a report in The Times, a third have failed to comply with guidelines saying directors’ pension contributions should be line with the rest of the workforce.

The second most difficult provision appears the nine-year limit on serving as chair. However, it is worth bearing mind that the UK governance code exists on a “comply or explain” basis. Compliance is not mandated.

A lesson in dual-class shares

The City is coming to terms with introduction of dual-class shares for premium listings. Or is it? One academic writing for the University of Oxford governance blog suggets that there are so many conditions attached to the use of stock with extra voting rights that they’re not really dual-class shares at all.

Bobby Reddy, an assistant law professor at Cambridge, writes: “The Listing Rules revisions do not represent ‘true’ dual-class shares, and instead merely constitute a five-year golden-share style takeover blocker with a guaranteed board seat.” He adds: “Perversely, those companies that do wish to adopt ‘true’ dual-class shares on the LSE will be restricted to the standard tier to which lesser corporate governance standards apply…”

Award-winning writers

Congratulations go out to Board Agenda contributor Nuno Fernandes (pictured), a professor at IESE, after being named winner of the renowned 2022 Outstanding Case Teacher Award. The judges said he is “deeply committed to his students and fully sensitive to different learning styles”. You can read Nuno’s articles for Board Agenda here.

There are other prizes elsewhere. London Business School professor Herminia Ibarra (also pictured) has won the Academy of Management’s Article of the Decade award for ‘Taking Gender Into Account: Theory and Design for Women’s Leadership Development Programs’. You can read Ibarra’s update for Board Agenda here.

KPMG sued over Carillion

More pain for embattled audit firm KPMG this week. Reports say the outfit is being sued for £1.3bn for its audit of Carillion, the construction and facilities management business whose collapse in 2018 prompted a wide-ranging review of audit and corporate governance.

The Times reports the action has been lodged at the High Court by the official receiver on behalf of creditors, and breaks down into £1.1bn for trading losses and £210m for lost dividends. There is also a claim for £39m in fees paid to KPMG for advising on fundraising and debt restructuring.

Still a man’s world

Women may have made progress in UK boardrooms, but across the world it is a slightly different story. A report from Deloitte reveals that women hold 19.7% of board seats globally against a widely accepted target of 30%.

The figure is better than the previous report, but “the pace of collective progress needs to pick up,” according to the authors. The report also reveals only 6.7% of board chairs are women, with even fewer holding the CEO’s role.

Not in my backyard

We all know chief executives sometimes go rogue. But what could keep them on the straight and narrow? A group of UK academics say working close to home may make the difference between involvement in “financial misconduct” and keeping things clean.

The team, from King’s College, Durham and Cambridge, find “robust evidence that CEOs who manage firms headquartered close to where they were born engage in less financial misconduct than non-home CEOs”. It also seems that the longer a CEO lives in their birthplace the less likely they are to get up to no good. Well done homies.