Cybersecurity needs you

Cybersecurity is a big topic this week, with the government launching a new pledge for boards to make on security and the National Cyber Security Centre (NCSC) warning that the UK faces a “perfect storm” of threats.

Setting the agenda at the CYBERUK conference in Glasgow, security minister Dan Jarvis said: “The cyber security of British business is a matter of national security.”

Richard Horne, chief executive of the NCSC, went a little further in his warnings to company leaders. He said they that whether they were “on the board or the IT help desk”, everyone needs to see cyber as their “mission”.

But he added: “Driving that cultural shift demands that we think differently with greater diversity of skills, minds and background.” This is essential to making the “case for cyber security and resilience as a strategic investment, not a cost to be minimised.”

Worth a thought when considering the next round of board appointments.

In pursuit of fair reward

The executive pay reports are coming thick and fast. Elsewhere, Board Agenda has reported Deloitte research showing that among the 55 FTSE 100 companies that have reported so far, CEO pay has risen on average by 18%.

Well, Deloitte are not the only ones with a report to wave. The High Pay Centre, a think tank, issued a report on Thursday saying that, over the past three years, CEO wage packets for chief executives in the 100 biggest UK companies is up by 33%.

The centre also notes that no FTSE 100 company has appointed a worker to its board in the past three years, and only 12% disclose with workers on executive pay.

The figures come as part of the centre’s Fair Reward Framework reporting developed with shareholder advisors Minerva and funded by the Church of England.

Andrew Speke, interim director of the High Pay Centre, said: “While there are small improvements in disclosure and governance, the overall picture is one of stagnation.

“Worker voice and fair rewards considerations remain marginal in corporate pay-setting.

“The big jump in CEO pay over this period also appears to reflect a growing sense that, amidst the drive for economic growth and backlash against ESG, companies feel able to reward ever larger sums to their executives, with limited expectations of serious pushback.”

As it’s the AGM season, we’ll see what investors think.

Courting climate litigation

Climate litigation has become a “systemic business risk” for boards, according to a new report.

The research, from law firms Baker McKenzie and Trench Rossi Watanabe, working with the World Economic Forum, concludes that litigation risk arises when there is a gap between public commitments and operational reality, or between transition plans and capital allocation, or even between supply chain expectations and actual oversight mechanisms.

Renata Amaral, a partner at trench Rossi Watanabe, says climate litigation must managed must be managed with the same “rigour” as any other significant risk.

“Courts are no focused on whether companies achnowledge climate change, but onw whether climate considerations are embedded in governance, strategy and decision-making.

“In many cases litigation is filling gaps where policy an dpractice lag, and in doing so it is influencing regulation, investor epectations and market behaviour.”

Alyssa Auberger of Baker McKensize weighs in: “For boards and executives, this means that to avoid becoming the target of climate litigation, control and oversight must be exercised over climate claims and disclosures made by the company to ensure that they are grounded in fact and treated with the same rigour and appreciated in the same manner as any other material legal or financial risk.”

Live what you preach guys, live what you preach.

Begging to differ?

Due diligence is always important and, in particular, human rights and environmental due diligence. Some worry, however, that sustainability due diligence is developing unevenly around the world.

A report from the Organisation for Economic Co-operation and Development (OECD) takes careful note of the problem.

“These differences can result in uncertainty for companies and their business partners, including around what an appropriate response looks like in a particular context, and how companies engage with suppliers and when they choose to disengage.

“It can also risk conflicting expectations for companies responding to the same issue under two different regulatory regimes.”

Sustainability is ever more important because—let Board Agenda be the first to say it—we’re going to need some international cooperation to make the due diligence work properly and optimise the demands on business.