Financial investigations rise

Financial sanctions levied by the UK’s governance and reporting watchdog have fallen year on year, but the number of investigations opened have increased.

The Financial Reporting Council reports that it imposed £14.5m in fines in the year to March 2025, compared with £48.2m in 2024. There are 32 current investigations, compared with 35 at this time last year.

However, the number of investigations opened has risen from six to eight. And all this achieved with a slightly smaller team.

Elizabeth Barrett, executive counsel at the FRC, warns that the value of fines depends on “numerous factors”. Care should therefore be taken with trend analysis.

One thing we are sure of is where audits go wrong, the main reason being a “lack of challenge of management and professional scepticism” following by failing to carry enough audit procedures and insufficient coaching, supervision and review.

So, there’s something to work on.

Good gig

Working from home a few days each week, sometimes the only person I see all day is the Uber rider who delivers my gourmet lunch-time sandwiches, barista-style oat milk and organic blueberries. I give him a cheery hello, standing at the door in my pyjamas, and wish him a good day as he sprints away, silent, for his next delivery, thankful that he turned out on his electric bike in the pouring rain.

This morning I read of algorithmic discrimination, AI systems trained on dodgy data that can ruin the lives of gig workers so they are assigned inappropriate tasks, wrongly calculates their pay or even terminates them from service.

Along with this phenomenon comes a warning about the corporate governance implications from academic David Lee and Felicia Feiran Chen  at the International Justice Mission.

“Directors and officers that fail to create risk management systems for algorithmic management may be unprepared and exposed to new legal and regulatory risks.

“Methods to mitigate risks include conducting AI audits to check for bias and compliance, and re-evaluating and re-classifying gig workers’ existing status. At the board level, corporations can establish board committees that address AI and cybersecurity risks.

“Further, they can create AI ethics committees to evaluate the ethical implications associated with the use of new AI technologies.”

That’s worth thinking about the next time you’re watching a man in waterproofs leg it up your garden path with katsu chicken and Korean barbecue beef buns.

High pay ‘needs review’

The House of Lords was this week witness to an attempt to push the government into reviewing the impact of pay inequality with “particular regard to the highest level of pay in comparison with median and lowest pay” in “large enterprises”.

Green Party member Baroness Bennett made the attempt by proposing an amendment to the Employment Rights Bill, writing a review into law.

The Baroness gave a nod toward the High Pay Centre, a think tank, and its polling, which shows public support for a cap on CEO pay, which should be no bigger than 20 times that of the company’s “typical” worker.

She also noted the current difficulties among water companies. “Fat cat pay has delivered only underinvestment, pollution and ill health for those unfortunate enough to have to rely on the services of the privatised companies.”

Baroness Bennett went on to argue that inequality, like disparate pay levels, fuels right-wing politics.

“Executive pay is only part of that, but it is a very visible part. This amendment offers the government a way forward to start to tackle that political problem, as well as the economic social issues.”

The amendment failed, but it goes to show, despite all efforts to talk up the economic necessity of high pay, it is viewed very differently outside the City.

Security spending rises

Over in the US, business experts have noted a sharp increase in security for CEOs since the murder of UnitedHealthcare’s chief executive, Brian Thompson, in December last year,

Advisory firm Equilar finds that spending on executive security “perequisites” rose 45.1% from 2020 to last year among the largest 500 US companies. For CEOs as a group, the rise is 48%.

“For years,” write Equilar’s Amit Batish and Joyce Chen, “critics balked at the idea of providing ‘lavish’ perks to corporate executives, arguing they are often excessive and unnecessary.

“However, the discourse has since shifted following the unfortunate murder of Mr Thompson and the evolving risk landscape.

“Today, boards are reassessing their security protocols amid emerging threats across various areas, including digital platforms and social media.”

A whole new realm of stress for CEOs in the US.