GSK plummets to bottom of index
SURVEY: 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 ranked GSK as the worst company among London’s largest listed firms.
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 Sir 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 per cent 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.”
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.