A new corporate governance code aimed at improving trust in business is published by the accountancy watchdog the Financial Reporting Council (FRC). The changes include banning senior executives from selling shares awards for five years and encouraging firms to improve how they engage with staff. The shake-up comes in the wake of high profile corporate failures such as the collapsed construction firm Carillion.
Meanwhile, the Bank of England (BoE) probes the strength of KPMG’s business after a string of high-profile corporate scandals damaged the reputation of the “big four” accounting firm. The BoE’s Prudential Regulation Authority, which supervises the UK’s largest banks and insurers, has raised questions with financial institutions and other regulators to see whether there were risks to KPMG’s viability.
The PRA is thought to have sought assurance on whether KPMG’s existing clients were planning to cut ties with the firm or whether it was struggling to win new business following heavy criticism of its work in South Africa and for British outsourcer Carillion.
Cometh the industrial revolution
Global workforces will be decimated as the next industrial revolution gets under way unless workers are retrained with new skills, says Siemens CEO Joe Kaeser. He said up to almost a third of jobs could be lost as the transition from combustion engines to electric cars takes place over the next decade, in what will be “one of the single most important transformations of all time”. He said it would be a key challenge for industry leaders to build the car of the future responsibly and get the transformation right, because ultimately many traditional roles will disappear in the short-term.
But Artificial Intelligence (AI) is set to create more than 7m new UK jobs in healthcare, science and education by 2037, more than making up for the jobs lost in manufacturing and other sectors through automation, according to a PwC report.
Trade war fears intensify
Rising trade tensions between the US and the rest of the world could cost the global economy $430bn (£324bn), with America “especially vulnerable” to an escalating tariff war, the International Monetary Fund (IMF) warns. The Washington-based IMF says the current threats made by the US and its trading partners risked lowering global growth by as much as 0.5% by 2020, or about $430bn in lost GDP worldwide.
Falling female leadership
The number of women holding the most senior jobs in the boardrooms of Britain’s biggest companies has fallen, according to a report that criticises the lack of progress made by businesses in getting more women to the top.
Analysis from Cranfield University, as part of its 20th FTSE Women on Boards Report, shows a sharp drop in the number of women occupying chief executive (CEO), chief financial officer (CFO) or other executive roles on FTSE 250 boards, and static numbers at FTSE 100 companies.
Brexit battle continues
Prime Minister Theresa May’s decision to accede to Jacob Rees-Mogg’s demand that the UK sever ties with the European Union on value added tax is condemned by British business leaders.
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It could also result in a hard border in Ireland, which would mean the proposal faces sudden death when considered by the EU, experts say.
The British Chambers of Commerce (BCC), describe it as a “bombshell”, said it would add significantly to costs; could make exports to the EU more expensive and less competitive; and could impact on the cash flow for small businesses trading with the EU, putting some out of business.
Britain crashing out of the EU without a deal would inflict significant economic pain across Europe, leaving the region without any winners, the International Monetary Fund (IMF) warns.
As the new Brexit secretary, Dominic Raab warns Europe to prepare for a no-deal exit, the IMF says such an outcome would hurt the UK most but would also have damaging economic consequences for Ireland and other EU nations.