Making a splash

Lord Prem Sikka has been busy again in the House of Lords, this time on the governance of water companies. Keen readers of Board Agenda will know that Lord Sikka, a former accountancy prof at the University of Essex, has been using the Lords to put pressure on the government to bring forward audit reform.

This week, he turned to advocating for amendments to the water special measures bill, aimed at addressing water companies’ failings.

Sikka wants the introduction of a “special administration” procedure for water companies, with a football-style “yellow card” warning system.

“It is often claimed that shareholders are passive,” said Sikka. “The threat of special administration for abusive practices would encourage them to actively invigilate companies and their boards and take an interest in their governance.

“For far too long, companies have got away with abuses; my amendment would ensure that there were serious consequence for them.” No one wants to see water company governance flushed away.

A load of baubles

How do we view non-executive directors? Essential cogs in the corporate wheel? Trusted stewards of corporate health and integrity?

Apparently, non-execs are not always viewed warmly. Not the view of Ed Warner but, writing in The Times, he reminds us of the industrialist Roland ‘Tiny’ Rowland calling non-execs “Christmas tree decorations”.

Board Agenda must confess this is the first time we had come across Rowland’s obviously dismissive description.

Naturally, we couldn’t possibly agree. Non-execs are essential players in corporate oversight: serious guardians of shareholder and stakeholder interests alike in this modern age.

Warner, puts it another way: “My short answer to stock interview questions about my approach to a NED position is that my job is to help the chief executive and their team be the best they can be.” That’s another good answer.

Anything but being sparkly and only appearing once a year.

The right stuff

Some religious news from the University of Texas, but it’s not what you think.

Hua Cheng and Liangfei Qiu studied the impact of political leaders on corporate sustainability policies.

They conclude Buddhism prompts better action to stop pollution.

“We demonstrate that companies located in cities governed by mayors with significant early-life exposure to Buddhism show markedly better environmental, social and governance performance, including reduced pollutant emissions.”

Sounds like good karma to us.