04 November 2016 by Henry Ker
The latest governance stories in the news
A government-backed review of boards has called for increased ethnic diversity at the top of companies, with a target of at least one director of colour on each FTSE 100 board by 2021 and one director of colour on FTSE 250 boards by 2024.
‘A Report into the Ethnic Diversity of UK Boards: Beyond One by ‘21’, led by Sir John Parker, set targets that nomination committees of all FTSE 350 companies should require their human resources teams or search firms to identify and present qualified people of colour for consideration for board appointments.
The report also called for work to be done on succession planning, to identify and promote people of colour within organisations in order to ensure a sufficient pipeline of board capable candidates, as well as proposing mentoring schemes. Alongside this, it proposes a diversity policy to be included in the annual report, with boards not meeting the recommendations explaining why.
Key findings in the report show that in the 1,087 director positions in the FTSE 100, 8% are directors of colour (compared to 14% of the UK population) and only nine people of colour hold the position of chair or CEO.
Sir John writes, ‘UK companies have made great progress on gender diversity but we still have much to do when it comes to ethnic and cultural diversity as a business imperative.
Many of us in business would attest that our experience on Boards that embrace gender and ethnic diversity benefit in their decision making by leveraging off the array of skills, experiences and diverse views within such a team.’
A new governance code for sporting organisations has been published. ‘A code for sports governance’, produced by UK Sport and Sport England, applies to all organisations within the United Kingdom that receive public grant funding.
Unlike many governance codes, it includes a mandatory set of requirements for organisations seeking public funding, as this was a requirement of the Government in its 2015 strategy.
The code, produced in consultation with over 200 sporting and non-sporting organisations, includes five basic principles of good governance at its heart. These are entitled: Structure, People, Communication, Standards and Conduct, and Policies and Processes.
Nick Bitel, Chair, Sport England and Rod Carr, Chair, UK Sport write, ‘In recent years, the UK’s sports sector has shown measurable and substantial improvement in its governance. Many sports organisations have shown a desire and commitment to own their own governance and ensure that it is fit for purpose. There is though still much to do. Diversity in sports sector boardrooms is still an issue and requires sustainable change.
We introduce this code, then, confident that the sports sector is well-equipped, and well-positioned to use it as a tool to further nurture the growing culture of good governance we already see on a daily basis.’
Louise Thomson, Head of Policy (Not-for-Profit) at ICSA: The Governance Institute, commented on the Code, saying, ‘Sport is a central tenet of British culture and recent governance failures have dented the public’s confidence and trust in many sporting organisations. ICSA: The Governance Institute welcomes this first step to improving sports governance with the introduction of the code.
The real challenge however, will be applying the code to the vast array of sporting organisations that do and do not receive government funding. Our certificate in sports governance and administration is one way we will help sports administrators and directors achieve this governance goal and new guidance will be developed to support the successful implementation of the code’.
Financing raised from the capital markets by UK businesses has fallen to £18.4billion this year, down from £22.6 billion in the equivalent period in 2015. This is due to uncertainty created by the EU referendum, according to accountancy firm Moore Stephens.
This drop marks the first decline in five years and underlines the challenges facing the new listings market, with several high-profile IPOs called off recently − last week software provider Misys called off what could have been the largest British technology IPO.