Drinks giant Diageo has been named the best large UK-listed company for corporate governance, but pharmaceuticals giant GlaxoSmithKline was judged to be the worst.
Diageo, the owner of Smirnoff, Guinness and Bailey's was crowned the top company in the Institute of Directors' third Good Governance Report, which evaluates public companies on factors including audit practices, whitstleblowing policies and directors' pay.
The ten best companies for corporate governance
The ranking of just over 100 of the largest companies on the London Stock Exchange put pharma company GlaxoSmithKline at the bottom in 103rd place. It had 31 fewer points than the next lowest firm, travel company Carnival, scoring 627 out of a possible 1,000.
A spokesperson for GSK told City A.M.: “We take our responsibilities with regard to corporate governance very seriously particularly in areas such as executive pay, board governance, employee diversity, audit management and relations with external stakeholders. While there is always more we could do, we don’t recognise the conclusions of this work and will seek to understand the findings fully.”
A spokesperson for G4S commented: "Like all boards, we are continuously looking at ways to strengthen corporate governance across the Group. The IoD report does not appear to reflect our current practice."
“Business is a form of sport," commented IoD deputy chairman Ken Olisa. "As with any sport, championship requires a comprehensive understanding of the human, the equipment, the arena and of course the rules.
"An obsession with the statistics of only one of those elements won’t win medals. And equally, conformity in which all of the participants are required to act in identical ways is antithetical to competition."
Prime Minister Theresa May has criticised the state of corporate governance in British business and proposed new measures to tackle what she calls the "unacceptable face of capitalism".
Estelle Clark, director of police at the Chartered Quality Institute said: “Corporate governance is much more than the narrow issue of executive pay and the misuse of zero hours contracts. Companies with potential governance issues will not find the remedy solely in the audit and remuneration committee.”
She continued: “Society’s view of what constitutes good governance is changing, moving away from the narrow definition of financial performance towards a broader definition that takes into account an organisation’s impact on all its stakeholders. The 2017 Good Governance Report has included measures of whether a company is a signatory of the UN Global Compact and the Prompt Payment Code, for example.”
Asos, Anglo American and Carnival were all contacted for comment.