I am still reading news on the departure of Tony Hayward as CEO of BP.  I know a lot has been and will no doubt continue to be written on this issue.  I have discussed the points made below with numerous colleagues both in the UK and elsewhere.  I therefore thought the least I should do was put down a brief note of the views we reached on one specific point which relates to the application of a couple of the rules on corporate governance.  I am sure others may have many other points to raise. Our discussion has been around the key question, who should depart, the Chairman, the CEO, both or neither? We have raised several further questions but have no answers.
 
We hadn't really appreciated until now what good corporate governance is all about.  We thought among other things it dealt particularly with issues of protecting and advancing shareholders’ interests through someone (we now wonder who, exactly) setting the strategic direction of a company and appointing competent management to do so. We also thought, after Sir David Walker's epic report last year, the key focus/focal point was to be the Chairman.  I would suggest perhaps this is even more necessary and indeed appropriate in time of crisis.
 

Nick Gould discusses the issues around the 'Companies Act 2006'.

 

'(...) it seems to me the difficulties involved in understanding much of the legislation may well not be of overall benefit to small (and not so small) businesses.  Do they have the time, the skill sets, or the resources to deal with the mass of complexities of the Act and the dozens of accompanying statutory instruments. Most are still not aware of the benefits, such as they are, which the Act attempts to introduce:  many are simply too busy trying to survive, particularly at the moment'.

About a year ago I wrote a short paper entitled "Problems with the law-how much is too much"?  In brief, I asked four questions which, depending on how readers took them, were either too simplistic, too complicated, or indeed both.  What they turned out to be were wholly relevant in the light of the financial and business crisis, which culminated after the Lehman collapse and which, despite what many say, continues and will continue for years to come.  I thought I should put together a short follow up note one year on from the original.

A  headline in the FT  last week  stated  "Michael Geoghegan, Chief Executive of HSBC has threatened to resign from his job if he is not elevated to the Chairman's role, according to people familiar with the bank's succession planning."   We are now finding out a little more of the power playing by members the Board of one of our largest companies.

In an article the other day in the Evening Standard Anthony Hilton made some extremely interesting comments on governance in the light of the proposed acquisition by the Pru of the business of AIG in Asia. Other commentators have suggested that ultimately the Pru could dispose of its UK businesses entirely, and even go as far as moving its primary listing, perhaps to Hong Kong. There are so many issues raised by this potential deal, but here are a couple which relate to corporate governance.