UK - BP's pioneering method to keep non-executives up-to-date with any problems in quoted companies should become best practice, a Morley Fund Management corporate governance expert claims.
Anita Skipper, Morley's head of corporate governance, believes the system adopted by BP could help flag up early poor governance issues that have hit companies such as Enron.
BP is unique in the UK for having a company secretary that reports exclusively to non-executive directors. This system has the advantage of ensuring that the non-executive directors get the correct information required to question the board.
Skipper said: “A lot of the problem is that the right information from inside a company does not get to non-executives. If a secretariat reports to the non-executives, there is a better chance that the right information gets to the non-executives who can make the executive accountable.”
She added: “For some companies this may not be the right thing to do. But for BP it demonstrates that they are taking corporate governance seriously by addressing the conflicts of interest internally in the organisation. This safeguards shareholder interest.”
BP vice-president corporate governance Jeremy Booker said the oil giant had decided to implement this process as part of its corporate governance policy in 1997. He added: “It means that the non-executive directors have a heightened consciousness of their role as representatives of shareholder interests.
The structure of board meetings and board committee meetings means that these non-executive directors are really probing the chief executive and his directors to make sure they are reflecting the interests of shareholders in their management and stewardship of the business.”
By Paul Sanderson
Former home secretary Amber Rudd is to return to the cabinet as work and pensions secretary after the resignation of Esther McVey.
This week's top stories included proposed draft regulations in a no-deal Brexit which would make scheme investments illegal, and Esther McVey's resignation as secretary of state.
There have been a total of 15 ministers responsible for pensions since 1997. Here is the list in full.