Yesterday I attended a Roundtable on the Financial Reporting Council's proposed new governance code hosted by PWC, under Chatham House Rules.
It's no breach of those rules to say that there was a highly charged atmosphere in the room.
It was well attended, with lively debates on the key proposals and a "something must be done" tone to the contributions.
Coincidentally, across the river Thames a select committee of MPs were grilling the CEO of the FRC who reported that it had been monitoring Carillion for six months before its collapse. Meanwhile the media is reporting new probes into the affair daily as well as its grim impact.
But will this turn out to be yet another cycle of disaster followed by hand-wringing and probes followed by "more of the same" next year?
Or is this an opportunity for the FRC to grasp the nettle which could create an environment that might prevent a repeat of a Carillion collapse?
I believe it is. That nettle stands tall in one of the key sentences in its own proposals for the revisions to the Corporate Governance Code:
"A successful company is led by an effective and entrepreneurial board, whose function is to promote the long-term sustainable success of the company, generate value for shareholders and contribute to wider society. The board should establish the company's purpose, strategy and values, and satisfy itself that these and its culture are aligned" (Appendix A- Revised UK
Corporate Governance, Section 1 - Leadership and purpose, Principles A.)
The nettle is represented by the words "contribute to wider society".
But Carillion's collapse has led to a loss for its shareholders and has contributed nothing but pain for society which will, ironically, be long-term in its impact.
So how can the Code make any difference in the future? How will the the Government's plans to introduce secondary legislation regarding Section 172 of The Companies Act 2006 prevent another Carillion horror?
I believe they won't make any difference unless the requirement to "contribute to wider society" is given the priority it deserves, whereby ESG - environment, society and governance - decisions are given precisely equal weight as return to shareholder decisions.
Even Harvard Business Review's rankings this year of the world's top 100 CEOs gave ESG factors a 20% weighting with an 80% weighting to financial factors.
What if the proposed revisions to the UK Corporate Governance Code and the proposed secondary legislation regarding Section 172 required directors to apply a 50/50 ROI/ESG ratio?
Would that help prevent another Carillion-type collapse?
I think so.