Welcome to your corporate governance briefing. This week I explore why it’s not a bad time for banks to consider appointing politicians to their boards.

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StanChart’s hunt for political insight

Standard Chartered has taken the hunt for its next chair into political territory, sounding out former UK chancellor Sir Sajid Javid and ex Treasury official Sir Charles Roxburgh for the role.

Both Javid, who was once Deutsche Bank’s head of credit and commodities trading in Asia, and Roxburgh, who had a long career as a McKinsey consultant before becoming a government mandarin, have strong ties to the financial services sector.

The road between StanChart and government is quite well-trodden. Go back far enough and you find former prime minister Sir John Major, who worked at Standard Bank, one of the components of the modern company, in the 1960s.

More recently, in 2008, then chief executive Peter Sands and finance director Richard Meddings helped put together plans to save the UK banking system after the financial crisis hit, hosting meetings for advisers and Labour government ministers at the bank’s headquarters.

The following year, StanChart’s chair and Sands’ predecessor as chief executive Lord Davies of Abersoch became a trade minister. He later led the Davies Review on how to improve board diversity. 

That the revolving door is now turning in the opposite direction ought not to be a surprise. Banks are regulated entities so their boards will always seek to benefit from insights into how politicians think.

As I’ve written here before, 2024 is also a year in which politics and geopolitics will impinge on corporate strategy, so it makes sense for boards to seek advice from people who were close to the political coalface.

Boards of UK companies will have a ready supply of former Conservative ministers to consider for directorships, if Labour wins a majority in the forthcoming general election.

It pays to be discerning, nonetheless. Another former banker and ex-chancellor said this week he would step down as an MP. Which bank, though, would be brave enough to hire Kwasi Kwarteng, the face of the disastrous “mini” Budget of 2022 that helped put an end to Liz Truss’s shortlived premiership and tipped the UK financial system into chaos?

Chart of the week

There has been plenty of cause for optimism among central bankers recently: inflation figures have been improving and, thus far, no crash landings.

But further disinflation faces a formidable foe — hot labour markets. And last week, figures showed that the US economy added 353,000 jobs in January — almost double what was expected. 

“The reality is that, with these pressures, it’s going to be very difficult to keep inflation contained unless productivity growth remains strong,” said Eswar Prasad, an economist at Cornell University.

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My top FT picks

ExxonMobil takes legal hammer to climate shareholder groups ESG: The oil supermajor slapped two small investors with a lawsuit alleging their climate petition breached US securities rules. The investors backed off — but Exxon did not Thank goodness we’ve reached peak MBA Leadership: Some academics argue that MBAs are less useful than their price tags suggest, and might even be a cause for concern, writes business columnist Pilita Clark McKinsey in soul-searching mood after Bob Sternfels’ re-election Purpose: With a win in the bag, Sternfels now needs to respond to complaints that he has concentrated decision-making in too few hands and run the partnership more like a corporation

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Best from elsewhere

1. The future of ESG: thoughts for boards and management in 2024 | Harvard Law School Forum on Corporate Governance The term ESG might be fading out of favour, but the need to address such challenges to secure “long-term performance and value creation” remain, the authors note. They share some trends and practical factors directors should pay attention to, including how to prepare for public scrutiny.

2. JetBlue/Spirit, Amazon/iRobot and the changing antitrust risk climate | Glass Lewis This in depth article looks at two case studies of mergers that hit the rocks, before taking a wider perspective on M&A activity. While it is US focused, it draws parallels to Europe and includes some handy implications for directors such as increased scrutiny of “board interlocks”.

Any other business

Cheng, an expert on the female voice at Dartmouth College, was commenting on the scrutiny of how women speak.

This follows research looking at “uptalk” — where intonation rises at the end of a declarative phrase — during earnings calls. It found that analysts “make lower recommendations in response to uptalk by female executives.”

Have words of wisdom to share? Email me.