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| May obscures workers-in-boardrooms U-turn with verbal gymnastics | May obscures workers-in-boardrooms U-turn with verbal gymnastics |
| (about 5 hours later) | |
| What was the point of Theresa May’s song and dance about putting workers and consumers on company boards? She first performed the routine in July in her pitch to be leader of the Conservative party and then, as if to emphasise the seriousness of her intent, she repeated it in her speech to the party’s conference in October. Now she has abandoned the idea. The business world made a fuss and May has backed down. | What was the point of Theresa May’s song and dance about putting workers and consumers on company boards? She first performed the routine in July in her pitch to be leader of the Conservative party and then, as if to emphasise the seriousness of her intent, she repeated it in her speech to the party’s conference in October. Now she has abandoned the idea. The business world made a fuss and May has backed down. |
| The relevant passage of the PM’s speech to the CBI on Monday was an exercise in verbal gymnastics designed to obscure the U-turn. Don’t be fooled. This is a retreat, pure and simple, and May is silly to pretend otherwise. Previously the PM was talking plainly about having “not just consumers represented on company boards, but employees as well”, while the new approach merely deems it important that “the voices of workers and consumers should be represented”. | The relevant passage of the PM’s speech to the CBI on Monday was an exercise in verbal gymnastics designed to obscure the U-turn. Don’t be fooled. This is a retreat, pure and simple, and May is silly to pretend otherwise. Previously the PM was talking plainly about having “not just consumers represented on company boards, but employees as well”, while the new approach merely deems it important that “the voices of workers and consumers should be represented”. |
| The language is superficially similar – but the two stances are miles apart. The former implied designated positions on boards. The new description mandates precisely nothing. Indeed, May was explicit that she would be happy to see a few “advisory councils and panels” that leave current board structures intact. | The language is superficially similar – but the two stances are miles apart. The former implied designated positions on boards. The new description mandates precisely nothing. Indeed, May was explicit that she would be happy to see a few “advisory councils and panels” that leave current board structures intact. |
| There is a fair argument that May’s original vision was unworkable anyway. Who is the “consumer” for a company like Rolls-Royce? Its direct customers like Airbus or Boeing, or people who fly on planes? For multinationals operating around the globe, could a single worker really have represented all interests? | There is a fair argument that May’s original vision was unworkable anyway. Who is the “consumer” for a company like Rolls-Royce? Its direct customers like Airbus or Boeing, or people who fly on planes? For multinationals operating around the globe, could a single worker really have represented all interests? |
| Yet May, presumably, had considered such practical objections when she set out her original thinking. She said then that non-executive directors, “drawn from the same, narrow social and professional circles as the executive team”, had failed to provide sufficient scrutiny. If that was the failing, the new iteration ignores it. | Yet May, presumably, had considered such practical objections when she set out her original thinking. She said then that non-executive directors, “drawn from the same, narrow social and professional circles as the executive team”, had failed to provide sufficient scrutiny. If that was the failing, the new iteration ignores it. |
| Not all companies, let’s be clear, are deaf to outsiders’ views and concerns. But, under May’s revised framework, the grubbier end of corporate Britain will be able to pay lip service to the gospel of inclusive capitalism and then carry on exactly as before. Future Mike Ashleys will not tremble. | Not all companies, let’s be clear, are deaf to outsiders’ views and concerns. But, under May’s revised framework, the grubbier end of corporate Britain will be able to pay lip service to the gospel of inclusive capitalism and then carry on exactly as before. Future Mike Ashleys will not tremble. |
| A parallel objection can be made about the other half of May’s speech on Monday: the passages about carving out a new industrial strategy. Did the PM actually think about policy details before making her previous bold promises about rethinking the government’s approach to business? Not on this evidence. | A parallel objection can be made about the other half of May’s speech on Monday: the passages about carving out a new industrial strategy. Did the PM actually think about policy details before making her previous bold promises about rethinking the government’s approach to business? Not on this evidence. |
| We will see only a green paper on industrial strategy this year, not a white paper. In the meantime, we have May’s ambition for the UK to be “the global go-to place for scientists, innovators and tech investors” with no clarity on the key question of how that unremarkable goal sits with the plan to reduce levels of immigration. | We will see only a green paper on industrial strategy this year, not a white paper. In the meantime, we have May’s ambition for the UK to be “the global go-to place for scientists, innovators and tech investors” with no clarity on the key question of how that unremarkable goal sits with the plan to reduce levels of immigration. |
| Meanwhile, May has discovered the financial industry’s new buzzword for long-term money – “patient capital” – and acknowledged the need for more of it. But her review, to be led by the private equity tycoon Sir Damon Buffini, will presumably go over the same ground as a report commissioned by Sir Vince Cable when he was business secretary in the coalition government. The trick is to formulate some policies, as opposed to describing the problem endlessly. | Meanwhile, May has discovered the financial industry’s new buzzword for long-term money – “patient capital” – and acknowledged the need for more of it. But her review, to be led by the private equity tycoon Sir Damon Buffini, will presumably go over the same ground as a report commissioned by Sir Vince Cable when he was business secretary in the coalition government. The trick is to formulate some policies, as opposed to describing the problem endlessly. |
| May’s speech, then, was a disappointment. On industrial policy, an extra £2bn for research and development is welcome but the big decisions lie ahead. On executive pay, it sounds as if the PM is retreating to the soft position of making all shareholder votes binding – the least radical reform. | May’s speech, then, was a disappointment. On industrial policy, an extra £2bn for research and development is welcome but the big decisions lie ahead. On executive pay, it sounds as if the PM is retreating to the soft position of making all shareholder votes binding – the least radical reform. |
| The desire to see workers in boardrooms has been replaced by an appeal to business to please be nicer in future. The complexities of Brexit seem to have bred timidity elsewhere in government, just as critics predicted. | The desire to see workers in boardrooms has been replaced by an appeal to business to please be nicer in future. The complexities of Brexit seem to have bred timidity elsewhere in government, just as critics predicted. |
| Sherwood’s Goldman: BHS was a blip | |
| Goldman Sachs was heavily criticised by MPs in the summer for adding “lustre” to the “otherwise questionable process” whereby Sir Philip Green sold BHS for £1 to a three-time bankrupt. The bank “underplayed to us the nature and extent of their role,” said the MPs, and Michael Sherwood was obliged to apologise for the “highly regrettable oversight” of failing to reveal, until the 11th hour, that Goldman had been approached to provide a £40m loan to facilitate the transaction. | |
| Now Sherwood is quitting as co-head of Goldman in London, a job in which he earned $21m last year. Is the involvement with Green, his old chum, related? Absolutely not, says Sherwood, BHS was “one blip in a 30-year career” and he was already thinking of leaving. | |
| There is no reason to doubt him, but Goldman, love it or loathe it, is a firm that prizes its reputation. We can probably say this: after BHS, Sherwood’s chances of succeeding Lloyd Blankfein as global boss had fallen to somewhere between slim and non-existent. |