Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Who runs the boards?

Written by Javier Maquieira, senior associate 
Edited by David Gaffney, partner
17 January 2022

Good morning,

In the last decade, the conversation around boardroom diversity has become increasingly earnest as more companies have begun to realise the benefits attached to it.
 
For businesses big and small, improving gender diversity at all levels has been linked to smarter decision-making, more innovation, and protection against blind spots, among other advantages. Despite some encouraging increases in the number of women occupying board positions around the world, however, change is still too slow.  
 
With a view to speeding things up in Europe, the president of the European commission, Ursula von der Leyen, is intent on pushing for a directive to boost women’s representation in corporate boardrooms during France’s six-month presidency of the council of the European Union, which began this month.
 
The legislation, which sets a target for 40% of non-executive directors in listed companies to be women, has been sitting on the shelf since the commission first proposed it in 2012. A few EU member states, including Germany and some Nordic and Baltic countries, had opposed it, arguing that the matter should be tackled at a national rather than EU-wide level.
 
Although the directive leaves the imposition of sanctions to member states and would not apply to small, medium-sized, or unlisted companies, the proposed target should be achieved through transparent selection procedures, with companies failing to meet their targets required to explain the reasons and report on the steps they would take.
 
In the UK, the final report of the independent Hampton-Alexander review, published last spring, found that the push to represent women more fairly in boardrooms had been making good progress. If we look at the data, when the review was started in 2016, just 25% of directors on FTSE 100 boards were women. In October 2021, they made up 38%.
 
Unfortunately, that’s not the whole story. According to a report by the Pipeline’s Women Count from last summer, the pandemic has slowed progress, with the predicted year for gender parity in FTSE 350 companies moving out by four years to 2036. Statistics also indicate that large corporations have achieved greater diversity than smaller businesses, not least because of the greater attention they receive from stakeholders and watchdog organisations, which fuels concerns about reputational risk.
 
If companies are to unlock the full benefits and successes diversity can bring, change is needed at all levels, regardless of company size. At a time when transformational leadership has become crucial, embedding diversity throughout businesses is not just the right thing to do; it’s business critical.  

News

The UK’s leader of the opposition, Sir Keir Starmer, has accused the prime minister of lying about “industrial scale partying” in Downing Street and breaking Covid laws during lockdown. The leader of the Labour party has also restated his call for Boris Johnson to resign, saying he had “degraded the office of prime minister”.
 
Two teenagers have been arrested in Manchester after the FBI said an armed British man travelled to Texas and took four hostages at a synagogue in what US president Joe Biden called “an act of terror”. The pair, whose ages and genders the police did not immediately reveal, have been arrested as part of the investigation into the attack.
 
The UK government plans to freeze the BBC’s funding for the next two years before abolishing the licence fee completely in 2027. The culture secretary, Nadine Dorries, is expected to confirm that the cost of an annual licence will remain at £159 until 2024, before rising slightly for the following three years. The move has raised doubts about the long-term financial future and editorial independence of the public service broadcaster.

Business and economy

The chairman of Credit Suisse, Antonio Horta-Osorio, has resigned with immediate effect following an internal company probe that reportedly found he had broken the UK’s Covid-19 quarantine roles. Horta-Osorio, who was the chairman of the global banking giant for only eight months, has been replaced by board member Axel Lehmann.
 
Unilever plans to embark on a major restructuring initiative and sell off slow-growth brands as it considers making a higher offer for GlaxoSmithKline’s (GSK) consumer unit. The disclosure comes after GSK said over the weekend that it had rejected three bids from the multinational consumer goods company for its consumer healthcare venture with Pfizer.
 
A report by Oxfam has revealed that the 10 richest men in the world have seen their global wealth double to $1.5tn (£1.01tn) since the start of the global pandemic. It follows a surge in share and property prices that has widened the gap between rich and poor. The charity has urged governments to impose a one-off 99% wealth tax on Covid-19 windfall gains, arguing the super-rich were benefitting from the stimulus provided by governments around the world.

Crown Estate Scotland is due to announce the results of its largest-ever auction of permits to build offshore windfarms today. The programme, known as ScotWind, is expected to raise up to £860m and generate as much as 10 gigawatts of additional capacity, effectively doubling the amount of electricity generated in Scottish waters. The auction has attracted interest from domestic and international bidders and has the potential to create tens of thousands of jobs in Scotland.

Columns of note

Writing in The Guardian, John Harries argues that the demise of Boris Johnson as prime minister could leave the door open for a Conservative successor inspired by “the bleakest of Tory values”. As the Covid crisis seems to have sent critical Tories back to their old beliefs, the author ponders the chances of a return to Thatcherism in Britain.
 
Giselle Weybrecht writes in the Financial Times that sustainability remains an under-appreciated and insufficiently developed topic in business schools’ curricula, as pledges to incorporate principles for responsible management education have largely depended on the existence of engaged deans, staff, and students. To change this, Weybrecht suggests that business schools place sustainable development goals (SDGs) at the centre of their offerings and operations; systems such as rankings to judge business schools change; and the global community recognises its role in achieving the SDGs and supporting the transition.

Markets

The week ahead

The European parliament will vote for a new president in a secret ballot today. Following the death of David Sassoli last week, Roberta Metsola, a Maltese MEP selected by the European People’s Party as its candidate for president, is expected to succeed him.
 
French president Emmanuel Macron, who has not yet confirmed whether he will be running in France’s presidential elections later this year, will be addressing the European parliament on Wednesday to give a speech to mark France’s assumption of the six-month EU presidency.
 
Back in the UK, Sue Gray, second permanent secretary in the Cabinet Office, is due to complete her official report into the British government’s “partygate” scandals. As more and more lockdown gatherings at Downing Street are exposed, calls have grown for the police to override Gray’s inquiry.
 
Consumer and producer price index data from Germany, the UK, Japan, Canada, and Italy, as well as the minutes of the European Central Bank Governing Council’s December meeting, are due this week, while earnings season will be in full swing, with the US markets expecting a bumper crop of results.

What’s happening today?

Trading announcement
Ashmore

Source: Financial Times

did you know

V is the only letter that is never silent in English. (Source: @8fact)

Parliamentary highlights

House of Commons

Oral questions
Home Office (including Topical Questions)
 
Legislation
Elections Bill: Remaining Stages
 
Adjournment
Experiences of midwives in the NHS

House of Lords 

Oral questions
Improving support for people with, and at risk of, eating disorders
 
Sustaining the increase in the National Living Wage
 
Progress made on delivering COVID-19 vaccinations to school pupils since the Christmas holidays
 
Report by the Chartered Institute of Personnel and Development: ‘What should an effective sick pay system look like?’ published on 14 December 2021.
 
Legislation
Police, Crime, Sentencing and Courts Bill – report stage (day 6)

Scottish parliament 

No business scheduled.

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