Risk averse and worse

Corporate governance elder statesman Bob Garratt says he worries that regulators have started to see risk-taking as an illegitimate activity.

Writing in the Financial Times, Garratt says his research across five continents found among regulators an effort to “build a new industry of compliance and reporting, but also to try and drive out any notions of risk and reward.”

He concludes that his greatest worry is watchdogs developing a “preconception that risk is unlawful and should be banned”.

Not sure Board Agenda sees things the same way. Not sure those who lost money at Carillion, BHS and Patisserie Valerie would agree either. And there lies the dilemma. If your money is on the line, you see proper reporting standards in an entirely different way.

Christmas rapping

And while we’re on the subject of watchdogs, the Financial Reporting Council has revealed what its ‘supervisory focus’ will be next year: it could be you, if you’re in the finance departments at construction, food producers, gas and water utilities, metals and mining and, last but by no means least at this festive time of year… retail.

The FRC will be checking on risks arising from the current environment, climate related risks, and in particular TCFD disclosures, implementation of the oh-so-dull IFRS 17 and, last but by no means least at this festive time of year… cashflow.

So, corporate reporting chiefs in those sectors, Merry Christmas! Have your turkey, but make sure you’re not stuffed if the FRC knocks on your door.

Unstable tables

Woah! S&P 500 firms do love their committees. Research—from US governance gurus The Conference Board—finds that 74% of S&P 500 companies have more than the three bog standard committees mandated by the law.

It turns out that over a third, 36%, have four committees; 21% have five, and 13% have six. Six!

Paul Washington, The Conference Board’s executive director, says the committee proliferations signals that boards have moved on from “independent oversight of management”.

“While boards still fill that role, they are increasingly serving as strategic thought partners for management across a broad array of topics, and boards should take a fresh look at whether their committee structure effectively supports the board’s current remit.”

Board Agenda’s all in favour of a committee, but six? Slightly concerned the stats include Christmas lunch committees which, as we all know, never reach a decision on a venue.