James Moore: Don’t yawn, it’s time we moved governance up a gear

 

Click to follow
The Independent Online

Outlook At its heart the slow pace of progress in getting more women into the boardroom is down to governance failings. The problems at Tesco are the biggest, and arguably ugliest, current example. If you’re the sort of person whose eyes glaze over when the “g” word is used, just read some of the cuttings generated by the supermarket that’s eating itself. What to do? The Institute of Chartered Accountants of England and Wales (ICAEW) has some ideas, having decided that the UK corporate governance code is showing its age after 20 years.

There’s an irony in this particular organisation complaining about the system being “unable to deliver what’s required, for example in relation to issues such as diversity, tax avoidance and pay”. The big accountancy firms have their fingers in any number of tax avoidance schemes. Many run remuneration consultancies that have driven the relentless rise in executive pay.

All the same, the ICAEW is to be commended for at least recognising that there is a problem. Its suggested solution is to develop a framework of broad principles that modern companies should adhere to; this would sit above more specific codes for particular groups, simplifying the current messy proliferation of guidelines.

If it sounds woolly, that’s because it is. There’s not much in the way of specifics, and you can’t help but feel this is all about a desire on the part of the ICAEW to demonstrate (sigh) thought leadership. That said, its raising the question is timely. As Tesco desperately scrambles to restore its battered reputation, it’s time to move this particular debate into a higher gear.

Comments