Fair shares

FTSE 100 firms this week stand accused of operating a “shareholders first” business culture after research by a think tank found that payouts in the form of dividends and share buybacks has increased for three consecutive years.

The High Pay Centre says the payouts have now reached 70% of profits.

News of rising dividends and buybacks comes on the day the House of Commons is due to debate amendments to directors’ duties to ensure they include the environment and employees.

Luke Hildyard, director of the High Pay Centre, says: “The shareholders first business culture fails workers, the environment and UK economy. Requiring directors to give equal consideration to these other shareholder groups alongside shareholders would help align business practice with the public interest, and restore public confidence in business.”

Sustainability strategy

Little noticed by most people, but the UK government’s industrial strategy also contains work to update UK corporate reporting. As the report went out, three consultations were launched on the adoption of UK Sustainability Reporting Standards (UK SRS), registration for sustainability assurance providers, and a plan for big financial firms and the FTSE 100 to issue climate transition plans.

Work on UK SRS has been underway for some time because they are based on IFRS S1 and S2, the standards issued by the International Sustainability Standards Boards in 2023 and under scrutiny by regulators over here ever since.

Justin Madders, minister for competition and markets, said: “We want to work with businesses to develop a ‘common sense’ sustainable reporting framework that is transparent, clear and proportionate for those investing in the UK.

“These measures will enhance competition in the sustainability assurance sector, helping to deliver on our Plan for Change and kickstart economic growth.”

So, as anyone watching the row in Brussels over amendments to sustainability reporting can tell you: be warned—this can be contentious stuff.

Seoul searching

Jen Sisson, chief executive of the International Corporate Governance Network, has travelled across the world to issue a warning.

Appearing in Seoul at the Global ESG Conference, Sisson said: “First and foremost, strong shareholder rights are critical.

“We know that some jurisdictions are attempting to attract listings by weakening rules, including diluting voting rights and permitting dual-class share structures, allowing closed door AGMs, making it harder for shareholders to table resolutions, and weakening listing rules and corporate law protection.”

We couldn’t possibly guess which jurisdiction she is referring to. Ahem.

Is London listing?

Bad news for London listings. Bloomberg reports the City is experiencing its lowest level of listings since 1997. “A grim milestone,” the writers add.

The gloom was deepened with news that AstraZeneca, one the UK’s premier companies and a global leader in pharmaceuticals, is considering a move to the US.

The company has declined to comment about the news, but commentators have not been so reticent. Julia Kollewe writes in The Guardian that is difficult for the London Stock Exchange, but also for a government that wants to grow the economy and make the UK an attractive place to invest.

“It will be the biggest blow yet to the London Stock Exchange,” write Kollewe, who adds that the potential move “threatens to topple a key pillar of the government’s fledgling industrial strategy and deprive the London market of its biggest star”.

Chancellor Rachel Reeves gives her Mansion House speech on 15 July. Hopefully, she may have some answers.