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Pre-election purdah

15 May 2017 by Peter Swabey

Pre-election purdah - read more

Governance reform will wait for the election, says Peter Swabey

Last month, I talked about the corporate governance landscape and where some of those changes might be leading. My crystal ball must have been even more cloudy than usual, however, as the article had barely been written before the report of the Parliamentary Select Committee was published and within days of that edition of the magazine landing on your desks, the Prime Minister had called a general election for 8 June.

Of course that changes everything and nothing. Civil servants at the Department for Business, Energy and Industrial Strategy (BEIS) will continue to plough through the responses they received to the Government’s Green Paper on Corporate Governance Reform, although they are now in pre-election purdah so we can expect to hear little about it. This is, not least, because until we have a new government, we cannot know what they will do about it.

“Whatever the outcome of the election we are in an environment where Brexit will take up increasing amounts of government time, energy and focus”

At the time of writing, we have yet to see the manifesto commitments that each potential government will make, and then perhaps implement. Even if the electorate opts for a continuation of Theresa May’s Government, it is by no means certain that Greg Clark will continue as Secretary of State for Business, Energy and Industrial Strategy, and a change of Secretary of State or other BEIS ministers may well have an impact on the issues that are prioritised within the department, although the party manifestos, when published, will have an impact.

Whatever the outcome of the election we are now, too, in an environment where the negotiation of Brexit will take up increasing amounts of government time, energy and focus. The election outcome in France and sabre-rattling over the negotiations suggest that this will not be an easy or short process.

As I mentioned earlier, the report of the BEIS Parliamentary Select Committee inquiry into corporate governance was published on 5 April. My analysis of the recommendations can be found the article 'Red, amber and green', and read the interview with recently retired MP Iain Wright, who chaired the Committee, 'Governance must evolve'. Overall, I thought the report was well thought through and contained a number of helpful suggestions, but the devil is always in the detail and in a number of cases the chosen method of implementation will be of critical importance.

In the interview, Mr Wright talks about connections, or relationships, between boards and stakeholders. In July, at our annual conference (book your place on the ICSA website) Professor Andrew Kakabadse will launch a report on tension in the boardroom – about the relationships between board members.

“The company secretary has a critical role in relationships between board members and also the board’s relationship with stakeholders”

In Andrew’s 2014 report on the role of the company secretary, he used the analogy of a bridge between the executive and non-executive board members. In my view, the company secretary has a critical role in relationships between board members and also the board’s relationship with stakeholders, supporting the chairman in ensuring that the board, and the company, work at their most effective.

On 4 May, we published a new piece of guidance which highlights ‘red flags’ for culture in charities – 13 ‘markers’ against which charities can benchmark potential cultural issues. This was the output of a workshop we held in December in an effort to help charities avoid governance problems resulting from a flawed organisational culture that may not match the stated values of the charity.

It is not only the corporate world which needs to work on regaining public trust. As Simon Osborne commented at the report launch: ’Charity governance is most effective when it provides assurances, not just that legal requirements are met, but that the behaviour of people working for the charity, and those who come into contact with it, is proper and ethical.’

Finally, as I mentioned in the last issue, I presented our guidance on minute taking at the Guernsey and Jersey conferences on 26 and 27 April and, as I write, I am packing my bags to repeat the presentation at the Isle of Man conference on 10 May. It was great to meet those members who joined us at these events and, once again, to see the keen interest in this subject among all members of our profession.

Peter Swabey is Policy and Research Director at ICSA: The Governance Institute

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