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Table Talk

05 March 2019 by Peter Swabey

Table talk

Roundtables, conferences and networking can help broaden our view of the industry

There is a risk that our editor will spike this article and give me a homily about not submitting ‘what I did on my holidays by Peter Swabey aged 43¾ [sic]’. But it has been an interesting month and I wanted to give the trials and tribulations of audit a rest for a while.

One of the most interesting events I have attended in the last few weeks was a roundtable with education governance professionals, discussing whether the CEO of an academy trust should be a member of the board. The Department for Education have heard views for and against, and we certainly had strong views in both directions expressed at the roundtable. I’m not sure what a FTSE 100 CEO would think about not being a member of the board, so this may be less cross-sectoral than some issues that we discuss, but it was very interesting nonetheless. We will be writing it up and publishing it in due course.

I was speaking at the International Corporate Governance Network conference on the development of hybrid and virtual AGMs, a consistently hot topic. Whilst there, I took the opportunity to attend their academic day and heard some fascinating presentations on potential hot topics for the future.

Two of these, in particular, made me think a little. There is a concern in the US about the impact on competition of ‘common ownership’, where one or more investors are significant shareholders in one or more competing companies.

In particular, there has been a study of some US regional airlines where the same handful of investors are the largest shareholders in each of the companies. It has been suggested that the owners might put pressure on management to compete less aggressively than they otherwise might.

The second issue was a study that seemed to indicate that shareholder voting may be affected where there is confidence that a vote will be either won or lost. Evidence indicated that those taking the less popular view are inclined to vote as a protest, whilst those who support what they believe to be the majority view may be ‘free riders’ assuming that others will carry the vote.

I wasn’t convinced that either of these are particularly significant in the UK, but it did seem interesting that both issues are starting to be discussed in academic circles.

I have also been lucky enough to be reminded of what a great job we have and the increasing interest in it.

First we hosted a delegation from Nagoya University in Japan who wanted to discuss UK developments in corporate governance and compare them with developments in the Japanese market.

Then I presented on the role of the company secretary to a delegation from Ethiopia being hosted by Crown Agents and was delighted to find that they are strong believers in good governance and the importance of the company secretary role.

Finally, I presented at the National Governance Association clerking conference in Birmingham, discussing our work with Board Intelligence on board reporting. It was great to meet so many committed governance professionals and to talk about some of the cross-sectoral issues that we
all face.

I have some more presentations scheduled in the coming weeks: corporate governance in Edinburgh, board reporting in Leeds and Belfast and, although I feel slightly too old for the job, on next generation governance in Leeds, Manchester and Guernsey.

On the subject of the next generation, I was delighted to be asked to present their certificates to the successful students of our Certificate in Employee Share Plans, run by Tapestry Compliance.

Students who successfully complete the Certificate are eligible to become Affiliated members and continue to benefit from the knowledge and support of our governance and compliance community and it was great to welcome them to the ICSA family and to present prizes, not least to Caitlin Slatter who came top in both examinations.

I have written elsewhere about the developments of the UK stewardship code, which saw the Financial Reporting Council and the Financial Conduct Authority each publishing a separate consultation on the topic, in addition to producing a joint discussion paper.

Developing our responses to these will be a key priority for the next month as will those governance issues that are affected by proposals for change in the audit market. We should be delighted to receive your feedback.

Peter Swabey FCIS is policy and research director at ICSA: The Governance Institute

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