UK: Ernst & Young Corporate Governance Survey

Ernst & Young has published the results of its annual corporate governance survey. According to E&Y's press release:

"The annual Ernst & Young Corporate Governance survey, conducted by Ipsos MORI among the UK’s leading 500 companies, found that 35% of respondents claimed that regulation and governance will be the number one challenge facing non executive directors in the next 12 months – followed by general economic conditions (13%) and legal challenges and accountability (13%). Environment made it onto the list of the biggest challenges faced by non executives – the first time it has been identified as a major priority for this influential group of company directors. Gerald Russell a senior partner at Ernst & Young comments, 'Environmental and social issues have been pushed up company agendas in recent years – pressure is mounting for organisations to demonstrate responsibility in such areas as climate change and ethical sourcing. Finance and business leaders are being called upon to provide oversight on this emerging area. It is encouraging to see that they are finally waking up to the need to account for sustainability'".

NB: Should we be surprised that non-executive directors are now citing environmental issues given that Section 172 of the Companies Act (2006) provides that directors must have regard to the impact of the company's operation on the environment as part of their duty to promote the success of the company for the benefit of the company's shareholders?