Still thinking about that FRC culture document...
Richard Anderson
Experienced Board Chair, Committee Chair and Non-Executive Director, Board Advisor, Risk Consultant
I published a document about the FRC's culture document the other day (see here: https://www.dhirubhai.net/pulse/alert-frc-publishes-long-awaited-guidance-culture-missed-anderson?trk=mp-author-card)
Two quotations in there keep coming back to me:
“The view of the FRC is that, while not perfect, the UK governance model is an effective means of meeting the objectives of, and arbitrating between, the many stakeholders in the market.”
Really? Isn't that what Brexit was about? In other words that a significant proportion of people in our economy feel detached from economic development that has benefitted the gilded elite in the boardrooms of 21st Century Britain. So how is that arbitrating between stakeholders? And if so many stakeholders are being arbitrated between, then why does the FRC appear only ever pay any attention to those in senior board room roles?
The second quotation that keeps buzzing round my head is from Stuart Gulliver, Chief Executive of HSBC:
“The tone has to come from the CEO ?– he is responsible for the delivery globally of a culture that values high standards of conduct. It’s about personal leadership and being very visible. There is no substitute for speaking to people face-to-face. Good stories, employee experiences are also important.”
Stuart Gulliver, Chief Executive, HSBC
Why, in the light of years of apparent abuse of markets, avoiding prosecution through the intervention of the Chancellor of the Exchequer no less, does this ring less than true? See the BBC for some more background: https://www.bbc.com/news/business-36848315. Perhaps face-to-face chats and good stories are just part of that 1980's style of culture management that have so utterly failed us. Perhaps the rules approach, so derided by the FRC in this document might have been more useful. Perhaps some of the more modern techniques that are emerging could have been rather more useful than face-to-face chats in a business that spans the globe.
Please, FRC, let's get a grip on this and refocus on to whom you owe a duty, and to whom you listen in the production of your documents. Then, maybe, just maybe, we might get some decent guidance on important issues such as culture and risk culture which are listened to in boardrooms.