Diversity issues, data security and better succession planning are high on the agenda for UK company boards during 2016, the head of corporate governance for Royal London Asset Management has claimed.
Speaking to Simoney Kyriakou, content plus editor for FTAdviser, Ashley Hamilton Claxton said the UK would see a lot more pressure coming from shareholders.
She said: “You are definitely seeing a lot more shareholders becoming more active and talking to boards, as well as boards coming to us as shareholders and seeking our feedback, which is a positive improvement.”
Boards are also more likely to make shuffles to reflect greater inclusion of women. Ms Hamilton Claxton said: “We have made some progress on the diversity issue this year. The 30 per cent club has been really successful in trying to drive progress at the board level.
“Next on the agenda is [getting more women] at the executive level. I think investors will put pressure on boards and ask for a shake up but they will only do this if they think there is a strategic reason or a performance issue.”
The inclusion argument is also ushering in a greater focus on diversity and inclusion, bringing people from different cultures and socio-economic backgrounds into the organisation and trained up through the ranks to become the next generation of board directors.
Ms Hamilton Claxton also said it was likely that data security might become more of a problem during 2016, with more warnings about cyber security hitting the headlines recently, as with the 2015 TalkTalk hacking scandal.
She said: “This is a huge issue. Data privacy and security is a major thing on the agenda for companies. They are investing a lot into it, but currently there are not enough directors on corporate boards with IT skills and even if they are skilling up in the business, we need to see more strategic governance from the board.”
This would also be very important when it comes to succession planning, especially with the inexorable advance of technology.
She added: “We need to see people with fresh thinking, people with the appropriate skills and vision to think about the challenges 15, 20 years down the line and so boards need to skill up in that respect.”
Indeed, succession planning is the best way to future-proof the business, according to Ms Ashley Hamilton Claxton, as failure to do this might create problems in the business and destroy shareholder value, so it would be critical for advisers to look out for and avoid companies where there may be difficulties ahead.
simoney.kyriakou@ft.com
