The Lack Lustre Love Affair

Football has been for many years an embedded aspect of British culture. The Premier League is probably one of the most talked about leagues globally and its international player base means that now, more than ever football is a global hot topic. Recently, the focus of the game has changed and there has been increasing media coverage of clubs going into administration along with allegations of bribery and corruption...

The Fish Rots from the Head

“The Fish Rots from the Head" is a Chinese saying and the title of Bob Garret's excellent book on corporate governance. I concur that if you want to get to the root cause of failure you need to go to the head. The buck stops with head of the organisation. If governance is the vehicle then the driver is the board.

The Cosmopolitan Problem

With the deal breaking down between Riverside and the troubled Cosmopolitan Housing, it does beg the question about how regulation works when a large association gets into difficulty. The issue at stake in this case was to do with obligations under student accommodation arrangements that Cosmopolitan built up over a number of years when the economic conditions were more favourable. However, last summer the 14,000-home landlord faced significant cash-flow problems, bringing it close to breaching lending agreements after difficulties around the financing of its student housing initiative came to light.

Know Thyself

Although the words "know thyself" are commonly attributed to Socrates, knowledge of self is what the sages of old, a long time before Socrates, described as the beginning of knowledge. True wisdom, it is said, comes from a knowledge of self.

I have been working recently with a number of boards on what can be defined as a High Performing Board and how to make the transition from being a good board to being a great board. As the UK Corporate Governance Code and many other frameworks for that matter suggest, boards should carry out a robust, self evaluation of their performance on a regular basis.

Women on Boards

Women now account for 17% of FTSE 100 and 13% of FTSE 250 board directors (as at 1 March 2013), an increase of nearly 40%.

Crucially women have secured 34% of all FTSE 100 and 36% of all FTSE 250 appointments since 1 March 2012 – the increase in 18 months is equivalent to the increase in the whole of the last decade! He comments “We are now moving to a place where it is unacceptable for the voice of women to be absent from the boardroom.”

Having a Stake- Student Spotlight

The idea of stakeholders comes from economic theory about the nature of the organization.

Originally, the idea was that the purpose of the organization was simply to make as much profit as possible. The owners of the company appoint the directors to do that and in doing so the owners incur costs (e.g. paying the directors) so it’s called “agency theory”. That idea comes from a time when owners could ignore the interest of people connected with the company such as the employees and the community. So academics started thinking about other ways of thinking about the company.

Governance Goes Social

You can’t escape from the compelling arguments for the organisation’s utilisation of social media. The press continues to highlight the success of organisations utilising social media for “taking the pulse” of the market. However, mistakes and missteps by organisations are highly visible, and the impact of viral attention in this area is widely known.

Governance is More Than Mere Compliance- Student Spotlight

Corporate governance is often presented as an issue of compliance - compliance with Codes and Standards, with regulators and of course with the law. Compliance is, of course, an important component of governance but it isn’t the whole story. The real way to think about governance is that it’s a relationship. It’s the relationship between the people who run the organisation and the people on whose behalf the organisation is run.

How the Codes have Developed- Student Spotlight

An important part of understanding corporate governance comes from having a knowledge of the various codes that seek to provide guidance on good governance practice. These codes have developed over the last twenty-five years.

In 1992 Cadbury Report was developed in response to a number of scandals that highlighted lack of confidence in financial reporting. It introduced the concept of “comply or explain” and promoted the role of non-executive directors on the audit committee. 

Comply or Explain - Student Spotlight

In the last student note we saw that governance has evolved through the development of a whole series of codes using the idea of “comply or explain”. We’ve also seen that governance is more than compliance and that since it’s a relationship with the organisations stakeholders it’s really about decisions that the board takes about how it wants to run its organisation.

However, compliance is important. Directors and trustees don’t just have “comply or explain why they don’t comply” with the corporate governance code for their sector. They must comply with the law.

For companies, the 2006 Companies Act sets out seven duties of directors:

Boards Can Be Your Best Asset During a Recession

Does having a carefully selected board of directors and a good governance protocol really make a difference to the performance of a social enterprise?

In the current economic climate, good governance and an effective board is crucial to the survival of a social enterprise.

This may not be immediately apparent, particularly where a social enterprise has been operating successfully for a number of years without any real attention to good governance.