Face value

Board Agenda was at the Chartered Governance Institute’s annual shindig this week to hear some interesting developments.

One thought-provoking comment came from Sarah Waddington, a crisis management expert and founder of Wadds Inc advisory firm, who was at the event to talk about boards and, er, crisis management. Waddington reflected on the possibility that someone on the board may have to front up to TV cameras to provide commentary.

“You’ve got to have someone who isn’t just being put forward because of their position of authority, but who is credible and very human,” she said.

Cue a room full of conference attendees casting their eyes to the ceiling, wondering just who on their board is human and who is not.

We can’t hear you

Elsewhere at conference the topic was audit committees and how they can keep shareholders happy, especially in a world where auditco responsibilities have been stretched beyond financial reporting to non-financial numbers.

Now, this was full of insights from panellists, but a note of irony was struck on the topic of audit committee-shareholder communication.

Tim Copnell, chair of the UK Audit Committee Institute at KPMG, and an audit committee member himself, said: “Audit committee chairs tell me that they’re constantly reaching to the investor community for that conversation, that dialogue, but it never happens. They don’t engage.”

Copnell noted others may tell a different tale but, really, investors, the auditco chairs are waiting. Go talk to them, don’t leave them feeling rejected.

A rose by any other name?

A confessional moment at CGI’s conference from Sandro Boeri, president of the Chartered Institute of Internal Auditors, during a discussion on risk and internal controls.

“I have to confess to spending 60% of my career looking at life as a defensive risk manager. In other words, I was helping organisations defend themselves. I think that was a gross mistake.”

He added: “Where does growth come from? Does it come from managing risk? Or does it come from taking risk?

“Words are quite important: I would argue if we replace the word ‘management’ with ‘risk taking’ we should really start looking at the art and science of risk-taking… that serves the businesses you work in, in the enterprises that you work, and makes them successful.”

You are absolved, Sandro.

Hands off

Elsewhere there is news of increasing friction between boards and senior managers. Research from BoardClic—90 interviews with chairs, directors and senior managers across Europe—shows trust may be in decline.

BoardClic says trust can be undermined by non-execs “meddling in the management domain”, with some managers describing their boards as “overly operational”.

And it may be a sign of the times, but BoardClic says non-execs are asking for more reports and data, “indicating a high level of scrutiny and a demand for detailed analysis”.

That said, the interviews reveal non-execs “don’t see themselves as being excessively demanding”. In fact, they see managers as being “too diligent, especially during high-pressure periods”. Because when the heat is on, the one thing you want to do is stay late to write yet another report.

These are interesting times.

Standard bearers at the ready

Governance enthusiasts will be gathering in London with the hope of putting the “G back into ESG”.

The wish comes from Jen Sisson, chief executive of the International Corporate Governance Network (ICGN), a club for investors, who stage their annual conference from 15 July.

Sisson is also keen to remind everyone of ICGN’s effort to maintain standards in London. You will remember ICGN has called for the Financial Conduct Authority to halt efforts aimed at loosening the rule around dual-class shares and shareholders meetings for big transactions.

Sisson said: “Strong shareholder rights are a core priority for ICGN, but we see these under threat in many markets, with regressive proposals to undermine investor influence, for example, through dual-class share structure, removal of voting rights, or introduction of virtual-only or closed-door AGMs.

“We need to focus on keeping these fundamentals in place.”