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The wellbeing of staff, local communities and broader society will be placed higher on the boardroom agenda, according to a pledge made by the CEOs of 14 major companies, including Capita, Unilever and PwC. A not-for-profit group called the Purposeful Company says it has brought together leaders from FTSE100 companies and large accountancy firms to demonstrate that having a purpose beyond a simple profit motive "brings strategic clarity, operational discipline around what's material to stakeholders and more meaningful work for employees". The bosses of EY, NHS England, NatWest, Barclays and Hogan Lowells are among the others to have signed up. Clare Chapman, head of Acas and co-chair of the Purposeful Company, said: "This is a moment to be seized. The more purposeful companies, the greater the chance of success in building a stronger and fairer economy and addressing the climate crisis."

 

The Guardian

The Wall Street Journal reports on how a pipeline shutdown has exposed the cyber threat to the US energy sector. Colonial Pipeline closed its entire 5,500-mile conduit carrying gasoline and other fuels from the Gulf Coast to the New York metro area Friday in the wake of a ransomware assault. The Colonial pipeline transports almost half of the gasoline and other fuels consumed on the US East Coast. Such attacks are “here to stay and we have to work in partnership with businesses to secure networks, to defend ourselves against these attacks,” Commerce Secretary Gina Raimondo said on CBS’s “Face the Nation.” Security experts think the energy sector is ill-prepared for such attacks. Padraic O’Reilly, co-founder and chief product officer of Boston-based CyberSaint Security, says of the prevalence of physical infrastructure in the sector: “There are just as many [operational technology] vulnerabilities as there are IT vulnerabilities, but they’re scarier in a way because they can go cyber to physical.”

 

Wall Street Journal

Provident Financial has announced it is withdrawing from doorstep lending after 140 years, putting 2,100 jobs at risk. The move comes amid scrutiny of the high-cost loans industry by the Financial Conduct Authority and a flood of customer complaints. Provident's boss Malcolm Le May believes that illegal lending could rise if regulated firms are driven out of the high-cost loans industry en masse. The company reported a pre-tax loss of £113.5m for 2020, with the bulk of the losses - £74.9m - coming from the home credit division. Provident will in future focus on the group's profitable credit card and unsecured personal loan division Vanquis Bank, which made £38m last year, and its car finance business Moneybarn, which brought in £10m.

 

BBC News

A triennial review of BT’s pension fund is expected to reveal that the scheme’s deficit has shrunk to £7.5bn, around £2.2bn lower than the market previously anticipated. Liabilities now stand at more than £54bn – nearly four times BT’s market value of £16bn – with the company agreeing to make annual top-up payments of around £900m a year until 2030. Going forward, Berenberg analyst Carl Murdock-Smith suggests delaying further contributions to the fund and investing instead in networks would bring BT the advantage of a greater tax shield from higher corporation tax in 2023 and a tax boost from the super deduction.

 

The Daily Telegraph

In a move away from higher-risk trading, Société Générale plans to shift the focus of its investment bank towards corporate finance and advice. “Global Markets will deliver . . . a more predictable performance,” SocGen’s Head of Global Markets Jean-Francois Gregoire said. Meanwhile, the bank’s Head of Global Banking and Investor Solutions division Slawomir Krupa said SocGen had no plan to shut down activities as part of the profitability push. “For the future, cost reductions will come from work on the cost structure,” Krupa said.

 

Financial Times

Reuters

A BBC investigation has found that more than 48,000 umbrella companies have been created in the past five years designed to exploit the UK government's Employment Allowance - an annual discount of £4,000 per company on National Insurance Contributions (NICs). The companies are originally incorporated with a British director, the BBC found. These directors then resign and are replaced with a director resident in the Philippines, making it harder for HMRC to pursue the companies, which are then used to employ workers in the UK. The report points to one example where a Covid test worker was hired through an agency to work for G4S, but the agency subcontracted to a mini-umbrella company (MUC). Jo Maugham, a tax QC and the founder of the campaigning group the Good Law Project, said: "It's not as though this is some tiny piece of tax avoidance […] This is industrial scale tax abuse.” He continued: "I mean it's really absolutely extraordinary, hundreds of millions of pounds if not billions of pounds is likely to have been lost due to HMRC's apparent disinclination to tackle this abuse."

 

BBC News

Daily Express

The Financial Conduct Authority spent almost £600,000 of taxpayers' money on Google adverts last year in an effort to warn consumers about internet scams, the Mail reports. This means Google is making money both from the fraudsters paying to advertise their scams as well as financial regulators warning about them, the Mail says. Now campaigners are calling for the Online Safety Bill to include a requirement for web giants to be made legally responsible for blocking and removing scams from their platforms.

 

Daily Mail

The Times’ Patrick Hosking talks with Zambian-born economist and writer Dambisa Moyo about life as a non-executive director. Her book, How Boards Work, describes some of her experiences at Barclays and other businesses and serves, says Hosking, as a guide to budding NEDs. Moyo is a cheerleader for capitalism and big companies but says board members are unsung heroes of global commerce. “Every day billions of goods and services are delivered across the world without incident. Boards are working,” she insists. She says that the need for more women and people from ethnic minorities on boards is incontrovertible but fighting discrimination with discrimination is self-defeating: “I’m not interested in losing high-performing white guys because we are gung-ho about diversity.” Finally, Moyo adds that some board guidelines in the UK need to change, such as limits on tenure, because boards need the kind of “institutional memory” that long-servers provide. The FT also reviews Moyo's insider account.

 

Financial Times

The Times

Plans being considered by the Treasury could see lenders required to ensure customers can still access cash even when branches are closed, in the wake of further closure announcements by Santander, HSBC and TSB. Gareth Shaw, head of money at consumer organisation Which?, said: “The Government must urgently set out its plans for legislation on cash. This should include giving the [Financial Conduct Authority] responsibility for the cash system, so that a clear strategy is in place to protect those who are not yet ready or able to move to digital payments.”

 

The Times

Deutsche Bank, Coutts, JPMorgan, and more than 20 individuals including Malaysia’s former prime minister, are being sued by the country’s state investment fund 1MDB in an effort to recover over $23bn in losses linked to the fund. Malaysia and US state investigators estimate at least $4.5bn was stolen from 1MDB between 2009 and 2014 in a fraud scandal that rocked the southeast Asian country. The claims are premised on "negligence, breach of contract, conspiracy to defraud/injure, and/or dishonest assistance," 1MDB said in the documents, filed at a Kuala Lumpur court. A Deutsche Bank spokesperson said: "We have not been served any papers, and we are not aware of any basis for a legitimate claim against Deutsche Bank."

 

Financial Times

Reuters

The Daily Telegraph

Alison McDermott, a HR consultant and whistleblower, talks to the FT about why she is taking UK nuclear waste site Sellafield and its owner the Nuclear Decommissioning Authority to an industrial tribunal.

 

Financial Times

Standard Chartered is to face shareholder action over its climate change policies, according to environmental organisation Market Forces. The move comes after the bank confirmed its participation in a $400m five year loan for global coal giant Adaro Indonesia, as part of a syndicate of banks. Market Forces UK campaigner Adam McGibbon warned that if the bank's policies do not improve, the campaign group will table a shareholder resolution at next year's AGM to “seek investor support to force the bank's leadership to properly address the climate crisis.”

 

City AM

Jane Ambachtsheer, the global head of sustainability at BNP Paribas Asset Management, says investors should start chasing politicians to help identify policies that support business and communities to speed up the transition to net-zero. “It's increasingly well understood if we don't implement the Paris Agreement, don't tackle the biodiversity challenge and crisis, significant portions of GDP are at risk,” Ambachtsheer said. “We need a plan. We need to accelerate that plan.”

 

City A.M.

Three members of the House of Lords have launched an attack on the International Accounting Standards Board's planned new insurance liabilities accounting standard, IFRS 17, the mark-to-market pensions model and the UK’s accounting regulator. Baroness Sharon Bowles, the former chair of the European Parliament's Economic Affairs Committees, said IFRS 17 would allow insurers to “reduce liabilities not merely for unrealised gains but for anticipated future income, giving the appearance of capital.” Lord Prem Sikka added: “In common with the Financial Reporting Council, the newly created Accounting Standards Endorsement Board will primarily rubber-stamp the international accounting standards.” He added that in contrast to the US, the UK had yet to address the accounting issues such as the 2008 financial crisis and the collapse of firms like Carillion. Finally, Lord Davies of Brixton accused UK regulators of being captured and said he doubted parliamentary scrutiny of the process of endorsing new standards would be effective.

 

ipe.com

The FT reports that developing countries say their nations risk getting nothing from new global tax rules proposed by the US, adding that limiting the companies involved to the top 100 lets thousands off the hook. The Economist looks over the various global taxation proposals and cites Carlos Protto, one of Argentina's representatives in the OECD talks, who says that focusing only on the biggest multinationals helps build consensus now, but also notes that many countries expect the scope of any reforms to be broadened eventually.

 

Financial Times

The Economist