Are purist corporate governance wonks out of control? Rupert Soames, chief executive of Serco Group, certainly fears they are.
Writing in today’s Times, Soames warns that the environmental, social and governance (ESG) industry is “screening out” companies that help governments do what they were elected to do — including those involved in nuclear weapons or the justice or immigration system — when advising fund managers which companies to invest in.
“Sensible public companies welcome transparency and strong governance; but if ESG analysts, trustees and fund managers think that their definitions of what is right for society trump those of democratically elected governments, then ESG has gone too far,” he argues.
Government suppliers will find it harder, or more costly, to finance themselves in public markets as a result, he warns, and public markets will become less attractive as the crevasse between the regulatory burdens faced by private and public companies widens. You can read his opinion piece here.
On the corporate front this morning:
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• Troubled Purplebricks has delayed publication of its results and warned shareholders that it could be forced to pay £9 million in compensation to tenants of its landlords after failing to put deposits into a national protection scheme.
Last month the online estate agency warned that profits would come in well shy of investors’ expectations. Investors marked shares 37 per cent lower on the day; since the start of the year shares in Purplebricks have fallen more than 70 per cent.
• In a brief pre-close trading update Capita, the outsourcer, warned that Covid-19 had continued to impact a number of its businesses and that top line growth has slowed.
• Laura Carr, the chief financial officer of Dunelm, is leaving the homewares retailer for a role outside of retail and the public markets, the company has said. Dunelm is beginning a search for Carr’s successor and she will remain with the business until the beginning of June
A record number of manufacturers are raising prices, with factory gate inflation of up to 10 per cent becoming “built in” to customers’ expectations, the trade body Make UK has warned before this week’s meeting of the Bank of England’s monetary policy committee.
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Manufacturers are responding to strong inflationary pressures that show “little, if any, sign of abating”, it found. A balance of 52 per cent of firms said they were increasing prices in the fourth quarter, up from 50 per cent in the third. Simon Duke has more on the survey, which was released overnight, here.
Later today (5.00pm) the Bank of England will release the results of its bank stress tests, which examine how prepared major UK banks and building societies are for unexpected economic shocks. We will also get the bank’s biannual financial stability report.
Finally, women now account for a majority of independent directors at Britain’s largest public companies, research has found. The biggest 150 groups listed on the stock market now employ 442 female non-executive directors, compared with 422 men, a report from Spencer Stuart, a headhunting firm, shows. We have got a full report here.
I’ll be on Times Radio just after 4.30pm today to talk through the day’s market action. Listen online, on DAB radio, your smart speaker or via the Times Radio app.
