Ed Milliband calls for “more responsible capitalism”

November 22, 2011

Ed Miliband

Last week Ed Milliband, speaking to a business audience, called for an overhaul of corporate governance in UK boardrooms to produce “more responsible capitalism”.

He suggested that  shareholdersvoting rights should vary depending on how long the shares had been held and also questioned whether companies’ long-term strategy was undermined by having to produce quarterly reports.

He also repeated his call for there to be an employee on the remuneration committee of every major company and criticised the government‘s plans to make it more difficult  for staff to take employers to employment tribunals, saying that the government was only offering “more of the same” in its backing for a “hire and fire” mentality.

As previously discussed in these pages, the idea of having an employee on remuneration committees is a bit of a non-starter given the difficulty of electing someone in an organisation of several thousand employees to be in any way representative and totally misses the point of having non-executives.

Similarly impractical is the idea of linking shareholder voting rights to the length of time the shares have been held – a nightmare for registrars and company secretaries with questionable benefits to corporate governance.

With regard to long term strategy perhaps he might like to consider whether long term political strategy is undermined by having to have elections every 5 years.


FAMILY BUSINESSES MORE RESILIENT THAN NON-FAMILY FIRMS

November 18, 2011

Family businesses in the United Kingdom are less likely to fail than their non-family counterparts, according to new research.

Entitled UK family businesses: industrial and geographical context, governance and performance, the report found that family firms – be it small, medium or large – have lower rates of insolvency than non-family owned businesses.

The survey, which analysed more than three million privately held firms in the UK between 2007 and 2009 and was conducted by the universities of Nottingham and Leeds for the Institute for Family Business Research Foundation, also suggests that family run companies are less likely to dissolve.

“Our analysis indicates that although family firms may be smaller than non-family firms and perhaps do not grow to the same extent, they are more able to withstand recession, and perhaps this is their most important feature,” said Dr Louise Scholes, co-author of the report, in a statement.

Corporate governance was also considered important by family businesses, with almost 20% of the companies involving more non-family directors than family at board level. Women were prominent, with 44% of family-owned businesses employing women as directors, as compared to only around 30% of non-family companies.

When it comes to the industry of operation, family-controlled groups tend to focus on certain sectors, found the report. While more worked in agriculture and fishing (44%), manufacturing, food and beverages, textile, retail, and motor vehicles, very few families opted to enter industries such as electricity, gas, transport and education.

Family businesses in the survey are those where the family owns more than 50% of the shares and at least one family member is a director of the company.


FRC announces changes to strengthen boardroom diversity from October 2012

November 16, 2011

Last month, the Financial Reporting Council (FRC) announced that it will make two changes to the UK Corporate Governance Code in order to strengthen diversity in the boardroom.

The revised UK Corporate Governance Code, which came into effect in June 2010, included a new Principle B.2 which stated that “the search for board candidates should be conducted, and appointments made, on merit, against objective criteria and with due regard for the benefits of diversity on the board, including gender.” Later that year, Lord Davies was commissioned by the Government to review gender diversity on the boards of listed companies and recommend how the Government and businesses could increase the proportion of women on company boards.

Following the completion of his review in February 2011 – and the subsequent FRC consultation paper on his recommendations for revising the UK Corporate Governance Code to require listed companies to establish a policy on boardroom diversity in May 2011 – the following changes relating to listed companies were announced:

  1. They will have to report annually on their boardroom diversity policy, including gender, and on any measurable objectives that the board has set for implementing the policy and the progress it has made in achieving the objectives; and
  2. They will have to consider diversity of the board, including gender, when evaluating their board’s effectiveness.

These changes have been deferred and will apply to financial years beginning on or after 1 October 2012; however, the FRC has encouraged all companies to voluntarily apply and report on these changes with immediate effect.


10 million interested in joining the board of a charity, but confusion remains about the role of a trustee

November 8, 2011

NOVEMBER 7, 2011
POSTED IN: HR STRATEGY & PRACTICE

  • 21% of British adults (10 million[1]) would like to sit on the board of a charity
  • Confusion about trusteeship remains: 51% of people don’t know what a charity trustee is
  • Young person’s game: 18-34’s are more interested in joining the board of a charity (28%) than retirees (15%)

Getting On Board, the charity that promotes board-level volunteering, reveals today that confusion remains about the role of the trustee, despite the high numbers interested in joining the board of a charity. Although 10.2 million people (21%)[1] confirmed they would like to sit on the board of a charity, significantly less (12%) stated interest in becoming a charity trustee – a role with very little fundamental difference. This figure suggests that British people remain unaware of the exact role of the trustee and is confirmed by 51% admitting that they don’t know what a charity trustee is.

The research also found that almost twice the number of 18-34 year olds are interested in joining the board of a charity (28%) as over 55 year olds (15%). This fact directly contradicts any outdated views of trustees as older retired professionals, and this high level of interest will encourage charities to actively recruit younger trustees to their boards.

London emerged from the research as the most charitably inclined location, with three in ten Londoners (29%) interested in joining the board of a charity. Although interest was reflected through the country, the South East and East Midlands saw the lowest level of interest in trusteeship at 16%.

This study was commissioned to mark Trustees Week (31st October – 6th November), the national campaign dedicated to raising awareness of trusteeship. Whilst there are around 800,000 trustees in England and Wales, Charity Commission estimates suggest that almost half of charities have a vacancy on their trustee board.

Sarah Hodgkinson, Chief Executive of Getting on Board, commented on the research: “It’s clear that there is a huge amount of interest in trusteeship – but confusion still remains. Our study shows that over half of the public don’t know what a trustee is – but two in ten would be interested in joining a board. Charities need to work together to ensure that the wider public have a better understanding of what a trustee is, to help take advantage of the broad range of valuable skills available in the private, public and voluntary sectors.”

Dame Suzi Leather, Chair of the Charity Commission, said: “Clearly the charity sector needs to do more to explain what a charity trustee is so that people realise what a fantastic opportunity it can be to make a real difference. Trustees are the driving force behind every great charity and are responsible for making decisions about a charity’s direction and activity. I have met so many trustees who tell me it’s the best thing that they have ever done and would recommend it to others.

“But as well as making a huge contribution to society, trusteeship can bring real benefits the individual. By being on a charity board trustees learn new skills, many of which can help them in other areas of their life. I would particularly encourage charities to consider recruiting as widely as possible for new trustees and to consider young adults in particular – they can add a new perspective to the charity’s work as the donors and volunteers of the future.”

What is a trustee? Trustees and their responsibilities (from the Charity Commission)
Charity trustees are the people who serve on the governing body of a charity. They may be known as trustees, directors, board members, governors or committee members. The principles and main duties are the same in all cases.

(1) Trustees have and must accept ultimate responsibility for directing the affairs of a charity, and ensuring that it is solvent, well-run, and delivering the charitable outcomes for the benefit of the public for which it has been set up.

*2,012 nationally weighted online Interviews were carried out by Opinium Research online from 28th to 31st October 2011. Respondents were asked: ‘Would you be interested in becoming a charity trustee?’ and ‘Would you be interested in joining the board of a charity close to your heart?’

1. 10,22,1960 million calculated as 21% of 48676000 (According to ONS 2009 UK population statistics, there are 48676000 adults in the United Kingdom)


Becoming a Non Executive Director

November 8, 2011

Panel Discussion

Free Seminar

Wednesday 16 November 2011 4.30pm – 6.00pm

Followed by an opportunity for networking until 8.00pm

Radisson Blu Hotel, Broad Quay, Bristol, BS1 4DA

Chair:    David Doughty – Chartered Director, Chief Executive, Chair, Non-Executive Director, Entrepreneur and Business Mentor

 Panellists:

                          Nigel Carter – COO & CFO FTSE 100 Banking Groups

                          Anthony Waller – Director, Waller and Associates Ltd

                          Kevin Jauncey – Director Digiweb and Milamber Group

 

Non-Executive Directors (NEDs) are no longer the preserve of large organisations, with more organisations than ever choosing to flexibly adopt new talent to the board.  The panel will be discussing this new environment by addressing the following topics:

What is it that enables one organisation’s board to deliver its leadership role more effectively than another?

Where leadership truly begins to emerge, there is often a team of people forming a board that have the appropriate mix of knowledge, skill and insight to take the organisation forward. NEDs form a crucial part of that team; exercising impartial & independent judgement.

Additionally, corporate governance is now a high priority for all types of organisation, whether operating in the private, public or third sectors.  The consequences of failure are grave but the rewards for success are high.

Who should attend? This event will focus on routes to becoming a Non-Executive Director, the relationships between Executive and Non-Executive Directors and the benefits to the firm of a strong and balanced Board of Directors. Our speakers will highlight their board experiences, how they have developed a portfolio of non-executive director positions and the impact they make. The discussion will thus be of interest to aspiring NEDs, organisations seeking to appoint NEDs and existing NEDs

This free seminar is organised by Executives Online in conjunction with the Institute of Directors, the University of Exeter Business School who run the IoD Director Development programme in the Region and Executive Transitions

Agenda:

Networking opportunity with delegates & IoD members

4:30pm Registration, drinks and snacks
5:00pm Welcome & Introductions
5:15pm Panel Discussion
6:00pm

DAVID DOUGHTY

David’s current roles include Chair at the Centre for Sustainable Healthcare and the Thames Valley Health Innovation and Education Cluster, together with NED roles at Zynap Hosting, Safe Pair of Hands Ltd and Management Systems Solutions Ltd

NIGEL CARTER 

Nigel is a Chartered Director with a career in financial services and with particular experience in wealth management, private banking, asset management and life assurance. Past roles have included Chief Operating Officer, Chief Financial Officer and Business Development Director.

ANTHONY WALLER 
Anthony is a specialist in corporate governance and has recently published a ground breaking report into the relationship between governance and company performance. Through Waller and Associates Ltd, he delivers board performance evaluations and helps SME’s develop and implement growth strategies.

KEVIN JAUNCEY 
Kevin is a senior executive having worked at board level in the Telecoms and IT/ Software market in both PLC and private companies for the last 10 years. A proven track record of growing business, good communication and building strong dynamic teams. He is experienced in raising capital in both the private and public sectors, and delivering strategies based on M&A activity. He has a deep understanding of the Global Communication market, and has developed a strong network of IT and Communication professionals and executives.


Was Alan Sugar right about engineers?

November 8, 2011

Free Seminar

University of the West of England, Bristol

Tuesday 8 November 2011 5.00pm – 6.30pm

Followed by Bristol Business School’s Distinguished Executive Address with  Terry Morgan, President of the Chartered Management Institute and Chairman of Crossrail and an opportunity for networking until 8.30pm 

Chair:          David Doughty   – Chartered Director

Speaker:     Paul Knight        – South West Regional Director, Engineering Employers Federation

Taking a light-hearted look at the role of Engineers in business, Executives Online and the Institute of Interim Management are hosting a discussion ahead of the Bristol Business School Distinguished Executive Address in which Terry Morgan, President of the CMI and Chairman of Crossrail will speak on “Managers and leaders – fit for the future”

After the addresses & Q&A session, delegates will be able to join the  Terry Morgan event . Canapes, drinks and networking will follow. 

This free seminar is organised by Executives Online and the Institute of Interim Management in conjunction with Bristol Business School, the Institute of Directors and the Engineering Employers Federation

Please register for the Terry Morgan event at www.uwe.ac.uk/dea

Agenda:  

4:45pm Registration, drinks and snacks
5:00pm Welcome & Introductions
5:15pm Presentation by Paul Knight & Discussion
6:30pm Terry Morgan address and Q&A session
7:30pm Canapes, drinks & networking

 David Doughty

Chartered Director – Chief Executive, Chair, Non-Executive Director, Entrepreneur and Business Mentor. Entrepreneurial sales and marketing specialist with strong strategic, analytical and commercial skills. Extensive executive and non-executive experience in small and medium enterprises in private and public sectors.Board level consultant to multi-national organisations. 

Paul Knight

Bulk of career has been spent in SME general management and Aerospace & Defence sales. Skill set biased towards business development, startegy development and CRM. Recently responsible for shaping, negotiating and closing a $400M contract with Boeing. Entrepreneurial by nature, aims to achieve success by building and empowering the right team of people.


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