02 Feb The FT-ICSA Boardroom Bellweather Report
Social media, business clubs, networking, the internet….the buck may stop at the top of an organisation but the idea that CEOs and directors work in isolation has long gone out of the window. Today’s business leaders live inside an ‘always on’ information world in which the sharing of ideas, information and connections is as important as the product itself. So much so that in can sometimes be hard to distinguish the nuggets of gold from the constant background chatter which parades past our eyes and ears on a daily basis.
One such ‘nugget’ which no director can afford to ignore is the FT-ICSA Boardroom Bellweather Report. Published twice yearly, the report anonymously “canvasses the views of the company secretaries of the FTSE 350;” in the process producing a rounded view of topical, business and governance issues. The latest report, published in December, covers a wide range of issues including the economy, risk and board diversity.
An interesting theme to emerge from this report is the increasing importance which boards are placing on engaging investors. Although the EU has proposed provisions to abolish quarterly reporting, 87% of companies now have a plan to engage investors in the organisation. Partly this may be driven by a desire to change the public’s attitude towards boardroom pay, with 24% of companies planning to improve the alignment between directors’ and shareholders’ interests in respect of executive pay. However, 62% of respondents consider that proxy advisors have a negative influence on shareholder engagement.
The picture is also changing when it comes to the make-up of boards. With 65% of respondents believing that reputational risk is not a barrier to attracting high calibre candidates; diversity seems to be the watchword when boardroom appointments are being considered. Business experience, geographical diversity and gender diversity all show an increasing trend with 51% of respondents now reporting gender diversity at the boardroom table.
Although reports of this nature only evidence a broad spectrum snapshot they can act as a catalyst for change, most particularly when emerging trends are evidenced. For example, the previous report showed that just 21% of organisations considered that the EU had a positive impact on their business. In just six months, this has doubled to 42%. It will be interesting to see if this trend continues but undoubtedly, results such as these can influence business, public and governmental thinking, actions and expectations.