Recruitment sweetener
A Mars a day helps you work, rest and… support ESG initiatives!
OK, that wasn’t the most poetic rendition of the old advertising jingle but it captures the recent comments from Mars Inc’s chief executive, Poul Weihrauch, in an interview with the Financial Times.
Reflecting on the current politicisation of ESG as guiding principles for business, Weihrauch said that without his organisation’s focus on “purpose” or “ESG”, the company would struggle to recruit young people.
“So from my chair, I think it’s a nonsense conversation.” He added: “We don’t believe purpose and profit are enemies.” Somebody had to say it.
The duel of denial
Those of you following the toxic political debate over ESG in the US will remember that Joe Biden had threatened to use his presidential veto to support permitting pension funds to use ESG judgments as part of their investment decision-making.
Well, it’s happened. The Wall Street Journal reports it was Biden’s first use of his veto. It killed a Republican-sponsored bill that would have overturned regulation allowing pension fund managers to use climate change information in asset allocation choices.
“The bill would risk your retirement savings by making it illegal to consider risk factors MAGA House Republicans don’t like,” Biden said in a tweet.
The WSJ reported senator Mike Braun saying the president was “doubling down on prioritising a progressive agenda over Americans’ retirements and the will of Congress.” Oh dear.
Trust found
This one’s a puzzler. Academic researchers have looked at “trust” between boards and their CEOs and concluded that where trust is highest, there tends to be “poor” M&A performance.
The team from Canada, the US and Hong Kong used measures of trust derived from proxies and matched those against stock market returns associated with more than 2,000 M&A deals conducted by members of the S&P 500. The team found trust was negatively related to M&A returns.
“Trust is generally accepted to improve the performance of institutions in a society, including business,” writes the team. “We find, however, that in the context of boards of directors, high trust in a CEO by the board can lead to inefficient M&A decisions.”
They add: “While a lack of trust cannot be good for board dynamics, our findings suggest that board trust may also be too much of a good thing.”
Gas giant
A bit of executive pay. The FT reports that Centrica’s chief executive, Chris O’Shea, took home £4.5m last year, about five times more than the previous year. The paper writes this was “despite a controversy surrounding its contractors’ treatment of vulnerable customers that has led to a regulatory overhaul of the instalment of prepaid gas meters”.
O’Shea’s pay in 2021 was £875,000, the FT reports, because he wanted to show solidarity with customers “hit by the cost of living crisis”.
Executive solidarity seems to have limits.