God in the governance machine

The message He should have taken from the autonomy experiment is that, as the owner of the garden, He needed to set clear rules for its administrators and enforce them.

But the subsequent several thousand generations of human history suggests God has been repeating this laxity ever since and, in this, He resembles the UK’s pension schemes.

This week, PW reveals virtually none of the UK’s largest listed companies are in compliance with the Financial Reporting Council’s combined code on good governance, to which half are signatories.

That these businesses are in a poor state of repair is partially the fault of their boards, managers and staff. But responsibility also lies with their shareholders.

The proportion of the FTSE owned by UK pension schemes is not what it was (nearly a third at the start of the last decade), but they still account for a little more than a tenth of the stock market, which gives them significant power to affect UK plc’s behaviour with regard to crucial areas like remuneration and senior appointments.

This is a power today’s figures suggest they are not exercising with sufficient diligence, which is wrong. The country’s institutional investor base cannot be an absentee landlord, to quote Lord Myners’ memorable phrase.

Schemes’ duty to their members is joined by an obligation to the wider economy when they choose to become company owners – they need to add the deus to the machina.