The Week in Breakingviews: New norms for boards

In banking, “cross-border” has been a dirty word for the past decade and a half. After the 2008 financial crisis, regulation and risk aversion prompted big lenders to retreat and hunker down in home markets. Now, though, financial giants like JPMorgan JPM.N and Santander SAN.MC are spreading their wings again. Liam Proud joined Aimee Donnellan and Jonathan Guilford in the Viewsroom to debate whether this time will be different. Donald Trump’s tariffs and scrambled global supply chains may seem like a modern phenomenon. Yet monarchs and countries have weaponised commercial chokepoints for centuries. Ed Conway, the journalist and author of “Trade World”, joined me on The Big View to unpick the complex origins of mundane products, and explain why Spanish Merino sheep were the medieval equivalent of Nvidia chips. Gautam Adani has had a bruising few years. The Indian tycoon faced down a 2023 attack from short-sellers, followed by a probe by the U.S. Department of Justice. Now, though, his $180 billion empire is once again expanding in India and overseas. Una Galani explains why the biggest opportunities for the industrialist known as “the man who owns half of India” are still at home. “Where is Japanese monetary policy set? As far as traders are concerned, the answer is increasingly Washington.” Read more: Takaichi’s Japan risks ceding policy control to US. 1. The average maturity of UK government debt is nearly twice that of France, Italy and Japan. (Could be shorter) 2. Following its Hong Kong IPO, fast-fashion firm Shein’s 0625.HK value sank 75% below its $98 billion peak. (More pain to come) 3. U.S. bond yields imply inflation will average 2.3% a year over the next decade. (Over to the Fed) 4. SoftBank’s $50 billion data center wannabe currently generates no revenue from data centers. (Masa Son strikes again) 5. Istanbul recently dethroned London’s Heathrow as Europe’s busiest airport. (Iran has scrambled flights) After technological innovation comes financial ingenuity. Frenzied demand for artificial intelligence chips and processing capacity is spawning a nascent futures market. There’s a long way to go before investors will be able to trade graphics processing unit capacity in the same way they speculate on oil futures. But, as Karen Kwok writes, chip giant Nvidia has a strong incentive to develop the market. Which company is better: Apple AAPL.O or BP BP.L? When it comes to performance, there’s no contest. The inventor of the iPhone is the world’s second-largest company, with a market value that has more than doubled to nearly $5 trillion in the last four years. By comparison, the British oil giant is worth roughly the same as back in September 2022. Ask which company has better governance, however, and the answer is more complicated. Apple CEO Tim Cook this week formally handed over to John Ternus after 15 years at the helm. But Cook will stay on as executive chairman, a job for which the company will pay him an astonishing $47 million in cash and stock in the coming year – only slightly less than his successor in the corner office will make. Arthur Levinson, previously Apple’s non-executive chairman, will become the company’s lead independent director. Contrast that with BP, which this week appointed Ian Tyler as its non-executive chair. As Yawen Chen notes, the British group’s boardroom has been a turbulent place: Tyler is the third chair in less than a year, while new CEO Meg O’Neill is its third boss since 2023. Still, BP has stuck to the letter of Britain’s Corporate Governance Code, which requires listed companies to have an independent chair. The practice of separating powers in the boardroom has dropped down the corporate agenda recently, particularly in the United States. Of the 10 largest U.S. firms by market value, only half have a chair who is not also the CEO. And only two of those – Broadcom AVGO.O and Tesla TSLA.O – are chaired by someone who did not previously run the company. It’s probably unrealistic to ask a single-minded founder like Nvidia’s NVDA.O Jensen Huang or Mark Zuckerberg of Meta Platforms META.O to share boardroom power. Investors have also shown they are willing to cede almost all control when buying into Elon Musk’s SpaceX SPCX.O. (See Giving up on governance.) Yet having a former CEO hanging around as chairman can cause problems. As Rob Cyran points out, for every James Gorman, who smoothly transferred power at Morgan Stanley MS.N and then stepped down as chairman of the Wall Street bank, there’s a Bob Iger, who handpicked his successor as Walt Disney DIS.N CEO before taking charge again. The BP drama is a colourful reminder that good boardroom hygiene does not guarantee corporate success. The question for Apple investors is whether its governance downgrade will eventually be reflected in the company’s performance.

The Week in Breakingviews: New norms for boards

Podcasts and parting shot

Opening line and five things learned

Chart of the week: AI chips and futures

Apple and BP raise different governance questions

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