Scan­dal-hit gi­ant GSK named ‘worst Lon­don listed firm’ in new IOD sur­vey

Belfast Telegraph - Business Telegraph - - Public Sector Jobs - BY KA­LY­EENA MAKO­RTOFF

A RE­CENT bribery scan­dal and ex­ces­sive pay poli­cies have sent pharma gi­ant Glax­o­smithk­line to the bot­tom of the In­sti­tute of Di­rec­tors’ (IOD) cor­po­rate gov­er­nance sur­vey.

The third an­nual Good Gov­er­nance In­dex (GGI) ranked GSK as the worst com­pany among Lon­don’s largest listed firms when mea­sured against 47 in­di­ca­tors in five broad cat­e­gories in­clud­ing board ef­fec­tive­ness, au­dit and risk/ex­ter­nal ac­count­abil­ity, re­mu­ner­a­tion, as well as share­holder and stake­holder re­la­tions.

IOD deputy chair­man Ken Olisa high­lighted that GSK has had “lots of is­sues” in re­cent years, in­clud­ing a scan­dal that al­legedly saw it make il­le­gal pay­ments to doc­tors in China in a bid to boost sales, as well as con­tro­versy over ex­ec­u­tive pay af­ter for­mer chief An­drew Witty saw his salary surge de­spite a drop in earn­ings.

How­ever, Mr Witty’s suc­ces­sor Emma Walm­s­ley has since been handed a to­tal pay pack­age worth around 25% less than her pre­de­ces­sor’s to­tal fol­low­ing a re­mu­ner­a­tion re­view.

Hav­ing been given “gran­u­lar” data on the rea­son be­hind their ranking, Mr Olisa said the GSK board should “go through all of the fac­tors... and say, do we agree with what the IOD have said and if we do agree with it, what are we do­ing about fix­ing it? Be­cause that’s re­ally what we’re try­ing to make hap­pen here”.

A spokesman for GSK said: “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.”

Other firms at the bot­tom of the ranking in­cluded Car­ni­val, G4S, An­glo Amer­i­can and ASOS.

Drink gi­ant and Guin­ness owner Di­a­geo was dubbed the best gov­erned blue chip firm, fol­lowed by Aviva, GKN and Barclays.

The UK bank­ing firm ranked highly de­spite a re­cent scan­dal that saw chief ex­ec­u­tive Jes Sta­ley face a reg­u­la­tory in­ves­ti­ga­tion af­ter he breached rules by try­ing to iden­tify an in­ter­nal whistle­blower.

While the Good Gov­er­nance In­dex counts em­ployee pro­tec­tion and whistle­blow­ing poli­cies among its mea­sures, Mr Sta­ley’s mis­con­duct fell out­side of the cut-off pe­riod for the Iod’s report.

Mr Olisa ad­mit­ted that Barclays’ ranking next year could be af­fected by the way the com­pany han­dles the scan­dal.

“Next year, it will be a ques­tion of how the board and the au­dit/ risk com­mit­tee deal with these things,” he said.

“If the chief ex­ec­u­tive is sanc­tioned by some­body but stays in post and has his pay quadru­pled, that wouldn’t be a good thing from a GGI per­spec­tive,” he added.

The IOD deputy said it was im­por­tant to re­mem­ber that the ranking is about how com­pa­nies re­act to mis­takes, not about whether they are made in the first place.

“You can’t stop things go­ing wrong in­side or­gan­i­sa­tions. Gov­er­nance is about how you con­trol your or­gan­i­sa­tion when those things hap­pen,” he said.

“No or­gan­i­sa­tion can be per­fect,” Mr Olisa added.

For­mer GSK chief An­drew Witty

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.