THREE-QUARTERS of UK board members see brand damage from scandals as the biggest risk they face, over direct financial costs or loss of business contacts, according to a new report released today.
Twenty-one per cent of UK respondents placed shareholder activism among their top three concerns, almost twice the global average. A number of London-listed firms, including Kentz and Ocado, have seen investors revolt over pay at annual meetings recently.
Twenty-seven per cent of UK board members are significantly concerned about tax-related scandals, compared to a global average of 21 per cent.
The study, written by the Economist Intelligence Unit and published by Clifford Chance, surveyed 320 board members of large companies worldwide.
“With tax and executive pay coming under greater scrutiny amongst press, public and politicians alike, UK boards are smart to take a stance on these issues; while not illegal, they may be considered by many as immoral, causing the kind of reputational damage that can be hard to bounce back from,” said Guy Norman, global head of Clifford Chance’s corporate practice.