Tuesday, 24 January 2012
Reform our boardrooms
Hot on the heels of the various speeches by our political leaders on responsible capitalism, we now have Vince Cable's plans on top pay etc.
I have blogged before on the unacceptable face of boardroom pay as evidenced by the arrogance of top bankers. But if they are to get big bonuses again , then let them donate those to charity. And make that public. As Clare Tickell said to Stephen Hester of RBS it is a big shame that top earners in the UK do not have a culture of major giving and publicising this as they do in the US.
But more importantly, as Vince Cable says , we need a "change of culture " in our boardrooms.
And one way to do this would be to make boards more diverse. As I argued when I was on the Tyson review of corporate governance back in 2000 having more third sector leaders on our Boards would inject a strong voice for an ethical and sustainable business approach. And as our leaders are themselves more diverse in gender and race terms this would also help address the heavy pre dominance of older rich white males on boards.
So I would encourage Vince to look at a much stronger push towards diverse boards. He is proposing 2 people on boards who have not been on boards before. This in itself will achieve little unless he says more in terms of other sectors and diverse backgrounds.
It's what Tyson argued but frankly her report had bugger all effect as companies sailed on regardless.
I wrote a rather splendid pamphlet on this whole issue back in 2004 " And why not" is still topical. And correct.
As the boundaries between our sectors get more flexible and blurred and the third sector works more closely with commerce then the case for board reform gets stronger.
But let's also be clear our own governance arrangements are not always transparent or accountable. I know from the stories of my own CEOs that trustee boards can be of variable quality. And not always diverse! However I suspect there are significantly more businessmen on our boards than vice versa!