Significant regulatory reform may be required to stave off the ‘biggest market failure of all time’ according to John Hutton, Secretary of State for Business, Enterprise and Regulatory Reform. He went on to say that the credit crisis might require a cross-party response to regulatory reform and there would be no knee-jerk legislation.

“Financial markets are fundamental to our global economy and our response to this situation has to be proportionate,” added Hutton. “We need a regulatory framework that supports, not stifles. There are some world markets that require stronger regulation than others.”

The UK government has already demonstrated that it is willing and capable of taking dramatic action in its attempts to avert any further financial disasters, such as its decision to push the HBOS-Lloyds merger through, despite the obvious competition issues. The decision seems to have met with the approval of the business community.

Since the collapse of Lehman Brothers there have been many calls for a reexamination of the legislation relating to the financial sector. Commenting on the bank’s collapse, David Wilson, ICSA Director of Policy and Strategy said, “The whole sorry saga possibly indicates a failure of - or at least inadequate - supervision of the financial industry by regulators, and raises serious questions about the state of internal control and risk management within that industry, both here and in the US.”

~ Chartered Secretary Newswire, 19 September 2008 ~

The chairman’s backing is essential to ensure that board evaluation processes are effective, according to a new article written by one of the directors of ICSA’s board performance evaluation service.

Simon Osborne, Director of the ICSA Board Performance Unit, argued that if chairmen do not buy into both the evaluation process and the format of evaluation, the entire exercise can become difficult, superficial and even counter-productive.

The article also argued that boards should think carefully about which method of evaluation they should use, as each has merits and drawbacks. For instance, in-house evaluations can cause the least concern to directors who are nervous of the whole idea, but also requires the chairman to be fully committed to the process. Otherwise, results may be unfairly influenced. While external evaluation can be particularly useful in certain situations - for new chairmen, for ‘old’ boards or when boards are challenged, they have a cost implication.

The article, which has been issued as the ninth in the Global Corporate Governance Forum’s series of Private Sector Opinion publications, also looks at issues such as the frequency of evaluations and what they should address, as well as a number of findings from ICSA’s experience of conducting board evaluations. The article, Board Performance Evaluation, is available from http://www.gcgf.org.

~ Chartered Secretary Newswire, 19 September 2008 ~

Corporate responsibility (CR) does not only address social welfare but also companies’ bottomlines in the long term. Orient Global Holdings Ltd chairman Richard Chandler commented that products are mostly developed for the wealthiest. The challenge is to move down the value chain to the next addressable market, which makes great business sense.

He remarked with an example - three new products that help farmers improve are drip irrigation, cellular telephones and low-cost insurance. In addition, there is a sense of moral purpose for employees and, at the same time, the company helps develop small and medium enterprises. That is what creates prosperity.

Family philanthropies can be effective in promoting CR. Thapana Sirivadhanabhakdi, president of Thai Beverage Public Co Ltd, said that his parents engage his siblings and him in all their initiatives. Some of their successful programmes include helping villagers in the colder part of northern Thailand to promote planting of fruits and vegetables instead of poppy seeds (beyond Thailand, the model extends to Myanmar, Afghanistan and Acheh) and community sports.

Francine LeFrak, president of LeFrak Productions and CEO of Samuel J. and Ethel LeFrak Foundation, remarked that when charitable programmes are designed, due consideration should be taken into consideration for its maintenance and sustainability of 15 to 20 years. In her work as film producer, LeFrak’s major aim is to shed light on social issues. Her films are aimed at helping to change laws and as a teaching tool.

~ The Star, 11 September 2008 ~

A global policy framework for renewable energy is needed in the world today and sustainable initiatives that focus on carbon tax should be developed. This is necessary as over the next 10 years as pollution and global warming are going to be very rapid.

A carbon tax is an environmental tax on emission of carbon dioxide and other greenhouse gases. To develop renewable energy there is also an issue of supply and demand and, for now, nuclear and solar energy has failed to become a fast enough alternative.

Renewable energy is an alternative in view of the higher cost of oil and fossil fuels. The development of resources, innovation and technology are, therefore, vital for the adoption of renewable energy.

Suzlon Energy chairman and managing director Tulsi Tanti said Malaysia should develop alternative sources of wind and solar energy. He added that there is some potential but the Malaysian Government has to do wind mapping before it can be implemented.

Solar and wind can make up to 20% of alternative energy sources in the world and the investment of wind turbines is US$1mil per kilowatt hour.

Khosla Ventures operating partner Ford Tamer remarked that imposing a feedin-tariff to accelerate alternative energy was also not viable as consumers would not pay more for green energy.

~ The Star, 10 September 2008 ~

A new survey in the UK has revealed a sharp increase in the number of firms that promote flexible and distance working. The latest employment trends report from the Confederation of British Industry (CBI) has discovered that almost half of the organisations surveyed now offer teleworking to employees up from only 14 per cent two years ago.

The survey also found that other forms of flexible working are on the rise, such as term-time working and job sharing. Employers have become increasingly supportive of staff looking to take career breaks or sabbaticals over the last five years.

John Cridland, CBI Deputy Director- General said, “Employers are embracing the benefits of flexible working, even as the economy heads into more uncertain times.?Using teleworking to take work out of the workplace has become very popular, and is also a useful way to avoid a laborious commute, balance family commitments, and even reduce carbon emissions.” He concludes that as technology becomes more reliable and widely available, this trend can only grow.

However, The Trades Union Congress (TUC) was not so enthusiastic about the report. TUC Head of Campaigns Nigel Stanley remarked that the survey reports some positive findings for staff and they welcome any signs that employers are offering more flexible working. “… it would be wrong to think that this survey is a scientific measure of all companies or all employees,” said Stanley. “This is a survey of Britain’s better employers and therefore looks through rose-tinted glasses at today’s world of work.”

~ Chartered Secretary Newswire, 9 September 2008 ~

The UK Government is promising more support for businesses as well as less red tape in a new raft of proposals on flexible working.

A new consultation from the Department of Business, Enterprise and Regulatory Reform (BERR) is asking for views on plans to extend the right to request flexible working to parents with children who are 16 and under. Currently, this only applies to parents with children under the age of six, parents with disabled children under the age of 18, and carers of adults.

The consultation is also suggesting a number of measures to make arranging flexible working easier for businesses.

Key to this aim is a move to reduce paperwork for firms, by removing the need to send a formal notification of agreement to changing working arrangements. This, the Government argues, reflects its understanding that such changes are typically handled informally. The obligation to write would not be removed where an employer refuses a request for flexible working.

The consultation also includes details of increased support to businesses on introducing flexible working hours. The consultation points out that BERR is already working to deliver improved guidance through its Employment Law Guidance Programme and the Business Link website, with plans to simplify guidance in the coming year.

~ Chartered Secretary Newswire, 29 August 2008 ~

Non-executive directors (NEDs) in the UK are committing an extra six days every year to companies while average pay increases are decreasing, according to a new survey.

PriceWaterhouseCoopers’ latest annual guide to NEDs’ practice and fees has revealed that, while the average time commitment has risen from 15 to 21 days, NEDs received lower pay rises last year than in previous years. This, the report argues, is due to fees becoming increasingly aligned with the scope and responsibilities of the role.

The report also reveals that formal reviews of corporate governance and board effectiveness are becoming increasingly prevalent in UK companies, with 84 per cent of respondents conducting annual performance reviews of their board.

~ Chartered Secretary Newswire, 21 August 2008 ~