18 July 2016
The political parties should consider ICSA’s research, says Peter Swabey
As part of an apolitical organisation, ICSA: The Governance Institute has refrained from commenting on Brexit or the outcome of the referendum. Members have opinions, both for and against, some strongly held, and so we have taken the view that we should focus on any governance-related issues that arise, rather than add to the superfluity of opinions being aired on the question of in or out.
Thus far, there are three governance issues that are worthy of mention and governance lessons that could be learned, all of which we have addressed in recent work.
Firstly, in my last two columns I mentioned ICSA’s report on the role of the nomination committee undertaken in association with EY, ‘The nomination committee – coming out of the shadows’. It seems clear that some of our political parties might usefully have considered this research and, in particular, the way in which many corporate boards are looking more deeply, widely and further ahead to identify successors for their CEO.
The second issue is also one on which I touched last month – that of rebuilding public trust in business. I suggested that, if we are to see a significant increase in public trust in business, which is surely in the interests of the long-term success of all companies, more thought needs to be given to how public trust can be regained. I fear that the same must now be said about many politicians.
Finally on Brexit, I mentioned last month our latest Bellwether survey, published on 23 May. Hopefully the 45% of FTSE 350 boards that have not assessed the risks and/or planned for a possible UK exit are now giving the issue serious consideration.
We will continue to monitor the situation as it develops and to maintain our links with contacts within the EU – whatever the outcome of Brexit, I am quite sure that the UK and the EU will continue to have an influence on each other for many years to come and, of course, there will be some parts of UKRIAT that remain within the EU fold. Even on the outside, there will still be a need for us to keep abreast of governance thinking in the same way that we do with the US and other countries now.
The policy team is undertaking two other major activities this month. The first is our consultation on the minuting of meetings, which closed on 24 June. We have received almost 100 responses to this and are currently working our way through them. I hope to be able to give you a flavour of some of these in my next column.
Second, is our guidance on the impact in the UK of the Market Abuse Regulation (MAR). As an EU regulation, this does not require implementing legislation and is directly applicable in UK law. Unfortunately, it does require some interpretation in order to be applied in the UK market and this has focused minds within listed companies.
We are delighted to be able to have helped with this and to work with GC100, the Quoted Companies Alliance, Slaughter and May and other market participants to develop a single, industry-led dealing code on which companies can base their compliance with MAR, amending these specimen documents to reflect their own individual circumstances and requirements. Our guidance note, ‘Market Abuse Regulation (MAR) Dealing code and policy document’ is the end product.
In the words of the probably apocryphal Chinese curse, we do, indeed, live in ‘interesting times’ and ICSA: The Governance Institute will continue to engage constructively with government and regulators on governance issues as they develop.