Norge Bank’s global view

Sustainability standards, those put out by the International Sustainability Standards Board, are winning some important allies.

This week, the giant Norwegian Oil fund, Norges Bank Investment Management (NBIM), threw its weight behind the new reporting standard, calling for “global adoption”.

Writing for the Harvard Law School governance blog, NBIM’s head governance people Elisa Cencig, Carine Smith Ihenacho and Wilhelm Mohn argue that adoption of the new standards will “bring significant benefits to economies”.

“For the many companies that operate across multiple jurisdictions, having consistent disclosure standards internationally will reduce their overall reporting burden.”

NBIM manages assets worth a paltry $1.6trn, so can’t imagine why anyone would listen to them…

Can-do attitude

Those eminent ethicists at the Institute of Business Ethics (IBE) have a new leader. Lauren Branston, veteran of almost a decade as director of corporate communication for Coca Cola in Europe, takes over the role of chief executive from Dr Ian Peters in September.

In the meantime, the IBE is positively fizzing. Chair David Grayson says. “We are excited to welcome Lauren as our new CEO. She brings the leadership and corporate experience that the institute needs.”

Lauren herself seems hardly able to keep a lid on her own enthusiasm. “I’m excited about the opportunity to take the IBE forward and to help businesses to ‘do the right thing’. Board Agenda will resist a Spike Lee quote this week. Suffice to say, Lauren looks like the real thing.

Delaware aware

As we write, executive remuneration consultants everywhere await the result of Tesla shareholders’ vote on Elon Musk’s eye-popping $56bn pay arrangement (shareholders voted it in, by the way.—Ed).

Cue the moment for one of the US’s most respected governance experts to lay into the Tesla board.

Lucian Bebchuk, governance giant and prof at Harvard University Law School, writes this week that Tesla’s board, led by Aussie businesswoman Robyn Denholm, really should be paying attention to January’s Delaware court ruling that effectively nullified Musk’s massive mountain of moolah for running the electric car company.

Bebchuk writes a “well-governed board should take a highly critical court decision with the seriousness that it deserves”. Sadly, Bebchuk adds, “the Tesla board chose not to do so.”

He concludes: “The protection that corporate law accords to public company shareholders is substantially dependent on effective judicial oversight of corporate decisions that are challenged by investors.

“For this system to work well, it is important that corporate boards take court decisions seriously and respectfully, drawing lessons from them to address identified deficiencies, and not react to such decisions dismissively and defiantly. Unfortunately, Tesla’s board seems to be taking the wrong approach.”

Odds were, despite high profile opposition, the plan would go through. But ouch! Those are comments that’ll take the charge out of your batteries.

For her part, Denholm spoke this week to CNBC. “Ratifying the plan is the best option,” Denholm said. “Clearly, if it doesn’t pass, then there are other alternatives, but none of them are as good from a shareholder perspective as actually ratifying the plan.”

She got her way. Musk got a huge pay day. Bebchuk and others may left wondering what happened to governance.