| Welcome to your weekly board briefing. Kate is in the hot seat this week, reporting on her interview with Sir Jan du Plessis, former chair of the UK’s Financial Reporting Council. As he retires from his long corporate career, including chairing Rio Tinto, he tells us about his best decision and what has — and has not — changed for directors. We also have top stories on Big Oil at the Supreme Court, possible lawsuits and damages associated with “rogue” AI and US investors. As always, if you want to catch up on recent briefings, you can explore the FT Infosys Board Network hub, where you’ll find links to the FT.com articles, research that we’ve referenced and our archive of briefings. Do you have comments or suggestions for the newsletter? Send them to Andrew Hill at andrew.hill@ft.com or Kate Hodge at kate.hodge@ft.com Thanks for reading. The constant in the chaos |
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Sir Jan du Plessis reflects on his board experiences as he retired from corporate life at the end of September. © Liz Isles Photography/Board Intelligence “I have this obsession about the long-term focus and I detest short-term decision-making in business and in politics,” says Sir Jan du Plessis, who retired as chair of the UK’s Financial Reporting Council — and from corporate life more broadly — last week. Indeed, he points to Rio Tinto’s decision to abandon a $19.5bn fundraising deal with Chinalco, a Chinese metals group, in 2009 as “possibly the best decision I’ve made”. At the time, du Plessis was chair of the Anglo-Australian miner. The deal was fraught: the debt-laden Rio Tinto needed cash but investors in particular were incensed. Indeed, our very own Andrew Hill wrote at the time: “Rio Tinto’s partnership with Chinalco poses the biggest challenge yet to shareholder rights in the UK”. In the end, notes du Plessis, after extensive meetings with shareholders, he recommended the board pursue a rights issue. The deal was abandoned and a $15.2bn rights issue was held alongside a joint venture with rival BHP Billiton. Asked why it was the best decision of his corporate career, he said: “It was very difficult at the time, but it was driven by my fundamental belief in the importance for businesses to take a long-term view.” The ability to hold on to long-term thinking amid endless volatility is “easier said than done, of course”. But for all the noise and change, du Plessis, who speaking at the Board Intelligence Governance Summit, notes that the role of directors “has changed, but they also haven’t really changed.” Directors still need to: commit the time to “do a proper job”; keep an independent mindset and ask appropriate questions (“don’t fall in love with the business and don’t fall in love with its people”); use common sense; and ask stupid questions. This feels somewhat comforting. For all the wisdom and experience gained across more than 40 years in the corporate world — and all the change and volatility witnessed — the basics tenets of governance still hold.
 “France is caught between the protesters on the street calling for more funds from the government and ‘bond vigilantes’ in the markets who punish perceived fiscal irresponsibility by betting against the country’s debt,” FT journalists wrote this week. Indeed, France’s debt sits at €3.5tn — nearly 120 per cent of GDP — and the costs of servicing that have rocketed (now outstripping spending on education or defence). Investors are concerned about a debt crisis in the country, that could have wider effects in the Eurozone.  | SEC warns asset managers against collaborating on activist campaigns | | Investors: US regulator says fund groups risk stricter rules after a probe into the ousting of ExxonMobil board members |
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Best from elsewhere CEO outlook | EY-Parthenon This research, based on a survey of 1,200 chief executives, highlights plenty of trends to unpick. One is “value leakage”: nearly a quarter of respondents said any gains in productivity “are absorbed by complexity, regulation, risk or new work demands”. One suggestion in the report is for bosses to rethink workflows to capture more benefit. Europe’s leadership moment | Center for Creative Leadership This research compared experiences of 1,741 European leaders with about 15,000 global leaders to explore the challenges they face. It highlights three capabilities to help leaders compete: complexity management; an “ability to discern how AI supports business strategy”; and passing on “leadership wisdom” down the generations. Do social norms substitute for enforcement? Evidence from public officials’ home purchases in Singapore | National Bureau of Economic Research This study has caused a bit of a stir, and has some interesting insights for boards about ethics. It looked at whether social norms can replace enforcement to deter public officials from misconduct, using Singapore as its testing ground. Findings included that “civil servants disproportionately purchase homes near planned — but not yet publicly announced — [transport] stations”.
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