Above board

“This was nuts,” Martha Lane Fox, board director and one-time founder of Lastminute.com, writes in her latest column for The Sunday Times. No, she wasn’t opining on the government’s ditching of key audit reforms (see below), or England’s lucky win against Fiji in the Rugby World Cup.

No, Lane Fox was commenting on a CEO she used to know who spent a hefty “chunk” of his time each week “calling and updating and manoeuvring” his non-execs.

‘Nuts’ does, in fact, seem the right word. After all, if the CEO felt they had to do that, what signs were the non-execs giving off?

The observations were part of a broader article arguing that boards should be there to offer help, not a “heart attack”. We couldn’t agree more. It talks about whether CEOs need experts on their boards, hefty board packs and lots of meetings to bring execs and non-execs together. All run-of-the-mill stuff, but also an indication that—even after long years of experience— getting the basics right is harder than it looks.

Red, blue, and greenbacks

Over in the US, corporate governance remains a contested issue and, sadly, the trigger for political polarisation. So much so, in fact, that one Washington-based professor claims that investors now “put their money where their vote is”.

Stephan Siegel (no, not the Putin-friendly martial arts actor with improbably dark hair), a finance and business prof at the University of Washington, concludes after some research that political affiliation in the US appears to drive “values” and these influence investment decisions “more and more”.

This means companies and investment managers have to be aware of the likely political leanings of shareholders.

Siegel writes in the Financial Times that he is worried this will create feedback loops between politics and economic interests and therefore “reinforce divides in society”.

Siegel suggests that “holding the market”, or diversified portfolios, could help heal social divisions. Can’t help feeling we’ve entered the realm of “chicken or egg” on that question, but we’ll keep you informed as developments break.

Dry your ice

News from Brussels: the EU’s massive new non-financial reporting rules—the Corporate Sustainability Reporting Directive (CSRD)—this week survived an attempt by right-wing MEPs to let it melt like an Alpine glacier.

MEPs across Europe had decided they weren’t going to allow a small minority to turn ESG issues into a battleground in the way right-wing Republicans have in the US.

Richard Howitt, a former MEP and one-time CEO of the International Integrated Report Council (a body so august it was partly founded by King Charles when he was a mere prince) and now an adviser on all things sustainable, congratulates MEPs who backed the rules against rebellion.

“Today is another historic day,” he writes, “which sets Europe and the world—and its business—on a better course.” We’re welling up. And we mean that.

Sold down the river?

A short note on Helen Thomas, one of our favourite columnists over at the FT.

On Monday, she published a piece lamenting the woeful lack of progress on audit reform measures under discussion, consultation, deliberation and endless confabulation for the past five years (our words, not Helen’s). The reforms were “circling the drain”, according to the headline on her article.

Later the same day, the government cheerfully announced much of that work had come to nothing: it was abandoning efforts to push through regs introducing new reporting measures on audit and resilience—central elements of the audit reform agenda. Business minister Kevin Hollinrake had, shall we say, flushed them down the drain. Sadly, audit reform, piece by piece, is being lost among the effluent now flowing through our rivers.