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Kerrie Waring: "All Stakeholders Are Important, But Only Shareholders Can Effectively Hold Boards to Account"

Kerrie Waring: "All Stakeholders Are Important, But Only Shareholders Can Effectively Hold Boards to Account"

FromBoardroom Governance with Evan Epstein


Kerrie Waring: "All Stakeholders Are Important, But Only Shareholders Can Effectively Hold Boards to Account"

FromBoardroom Governance with Evan Epstein

ratings:
Length:
51 minutes
Released:
Oct 12, 2020
Format:
Podcast episode

Description

Start of interview [1:06]Kerrie's "origin story" [1:34]Her initiation on corporate governance matters with the UK Institute of Directors (IoD) (2000-2004) [3:49]Her take on corporate director education and training [5:42]Her role at the Institute of Chartered Accountants in England and Wales (ICAEW) (2005-2008) [7:43]Her transition to the International Corporate Governance Network (ICGN)  (2008-Present) [9:49]History and mission of ICGN [11:56]. It was established in 1995, it has grow to over 800 members from 43 countries, (~70% of members are based in North America and Europe, ~20% in Asia). These members represent ~US$54 trillion of AUM. ICGN Global Governance PrinciplesICGN Global Stewardship PrinciplesEngagement with regulators (they send ~20-25 engagement letters to regulators per year). "ICGN brings a global investor flavor to national issues."The concept of "investor stewardship" and its evolution over time [15:27]The Cadbury Report (1992)The UK Stewardship Code (2010)The European Shareholder Rights Directive II (SRDII) (2020).Recently, UK and Japan have expanded stewardship principles beyond equity to all asset classes (Japan Stewardship Code, 2020)Her take on the debate of the purpose of the corporation (shareholder primacy vs stakeholders) [20:36]Business Roundtable's Statement on the purpose of the corporation (2019)Europe's Consultation on Sustainable Corporate Governance (2020)Section 172 of the UK Companies Act (2006)CII's statement opposing the BRT's 2019 Restatement ("accountability to everyone means accountability to no one")On the rise of ESG [26:47] "[I think] ESG has grown from a deeper understanding of stewardship since 2008... I would take away the G [since we've always been focused on governance] so really what we have witnessed is the rise of E and S... and this year COVID has shifted the narrative particularly around the S." For example, ICGN members have focused on "human capital management":Health and safetyStaff training due to WFHIncome inequality, pay.Many ICGN members have formed the "Human Capital Management Coalition" which has been engaging with the SEC, resulting in new disclosure rules involving human capital resources  [28:49]Her take on climate change [29:31]ICGN is calling for ESG reporting on an international scale to address climate change.Many ICGN members are calling for Task Force on Climate-Related Disclosure (TCFD) frameworkNZ is the first country in the world to make climate reporting compulsory with TCFD.Her take on diversity [32:38]Focus on disclosure of diversity policies.Measurable targets, goals and time periods.Boards should disclose skills matrix. "For me, one of the biggest barriers of board diversity is director tenure, 'zombie directors', we need to have a policy of board refreshment and board evaluation." "There is still a problem surrounding the 'old boys network', the 'male, pale and stale crew.'"Her take on Big Tech [39:14]She's worried about the "covert behavioral manipulative algorithms that are gradually changing the way we think, feel and act." (for example, as described in The Social Dilemma documentary)ICGN has not weighed into this issue. From a governance perspective many ICGN members cannot influence these companies due to dual-class share structures that make them less accountable to shareholders (ICGN advocates for a "one share one vote" structure)."The U.S. also has weaker data privacy regulations than Europe, and that's a problem."Her parting thoughts for directors "investors are your allies" [44:34]Her favorite books: [49:27]Ten Arguments for Deleting Your Social Media Accounts Right Now, (2018) by Jaron Lanier (this is the book that she's currently reading)Factfulness, (2018) by Hans Rosling.Corporate Governance and Chairmanship, (2002) by Sir Adrian Cadbury.Her professional mentor: [46:45]Anne Simpson, currently at CalPERS.His favorite quotes: [47:50]"You can’t go back and change the beginning, but you can start from where you are and change the endin
Released:
Oct 12, 2020
Format:
Podcast episode

Titles in the series (100)

In-depth interview podcast with leading corporate governance experts, including world-class founders, scholars, board members, executives, investors and more. The content is structured as a long-form conversation to explore not only the latest corporate governance trends, but also to get some personal insights from some of the best and brightest minds behind America's boardrooms.