An article in the FT unveiled what many of us had feared: the chairmen of some of Britain’s leading corporations are failing to properly articulate the principles and values that drive and motivate them. The news came from a report by advisory firm Grant Thornton released late last year, following a study into the annual reports of FTSE 350 companies.
But not only are corporate captains failing to properly set out a clear tone from the top, of the 350 annual reports surveyed, a quarter made no reference at all to corporate governance. 5 years after the global financial crisis hit we’ve been hit by scandal after scandal. Lessons have been taught but not learnt it would seem.
Each scandal from Barclays to RBS has taught us what can happen if leaders fail to embed a principled ethos from the head of the company. Yet chairmen are not taking on these important corporate teachings. Of the 23% who gave insight into the values of the company only 5% did so in any depth or with any sort of strategic impetus.
These findings are startling and really go to underscore the complacency of British plc. What many seem to forget is that a big corporate are a team like any other and so they need a strong Chairman. They, like any team, need strong and resolute leadership, a clearly articulated corporate vision and ethos, a delineated chain of command and a responsive governance team ready to adapt.
The findings of Grant Thornton should stand as a reminder of what needs to be done.
However it’s not all doom and gloom. In 2011 only 50% of the same sample referred to corporate governance in their annual report and only 10% addressed the culture of their company. So in terms of numbers things have improved.
Nevertheless the clear need and want is there: every chairman of a FTSE 350 company needs to take note and so make themselves and their values known throughout the company. So that, quite simply, everyone is singing off the same sheet. But ultimately it can’t just be a wonderfully drafted annual report, they need to live daily by their corporate mission statements.
Lucy is Editor at Corporate Eye
