Chairmen’s double trouble
WHAT do Hammerson and Sainsbury’s have in common? Apart from the obvious – those big merger plans that hit the rocks – the answer is that City grandee David Tyler is the chairman of both companies.
Tyler, who also chairs insurance outfit Domestic & General, is stepping down from the role at Sainsbury’s very soon.
But he has been at the helm over a crucial period for the supermarket when it tried to pull off its now seemingly doomed tie-up with Asda.
More than enough to keep him busy. But he has also had an eventful year at shopping centre owner Hammerson, including an abandoned bid for rival Intu.
Hammerson has run up large losses and is now having to deal with hardball activist investor Elliott Advisors, a US outfit that takes no prisoners.
The board is in flux having recently lost veteran retailer Terry Duddy to run Debenhams. It has just appointed one new nonexec and is looking for two more.
The point here is that the days when seasoned businessmen could shuffle into a few chairmanships and agreeably lunch their way into retirement are gone, if they ever truly existed. One chairmanship can be very hard work, let alone two or three. Look at Roberto Quarta, who as the chairman at WPP, had to deal with the row over Sir Martin Sorrell’s exit. At the same time, he was chairing Smith & Nephew, another UK company that came under pressure from Elliott.
Peter Long is another. He stepped down as chairman of Royal Mail, where there was a row over the pay of new chief executive Rico Back, to concentrate on troubled estate agent Countrywide, where he is executive chairman.
This isn’t a slight on anyone’s ability, but a question of good governance. Although theoretically most chairman jobs are part time, there is an understanding that they will be ready to devote as much time as needed in an emergency.
But how can he – and it almost always is a he – avoid being overstretched if there are crises or complex transactions at his companies at the same time? It doesn’t matter how brilliant a chairman may be, multitasking has its limits.
Even disregarding that obvious risk, it shows companies are being far too unimaginative in their recruitment. If they hired people from outside the same old narrow group, there might be less groupthink and better performance. It defies belief that there is such a dearth of talent that companies really are forced to double up. Brady bunch I’vE always had a healthy respect for Karren Brady after hearing of her magnificent put-down when a footballer at Birmingham City, where she was managing director, declared he could ‘see her t**ts in that shirt’. To which she replied: ‘Don’t worry, when I sell you to Crewe, you won’t be able to see them from there.’
Lady Brady is unusual because she, and not her male heckler, had the power in this encounter. Similarly, her belated decision to step down as chairman of Sir Philip Green’s retail empire is a gesture that won’t do much to help the cause of ordinary female employees who can’t afford to quit their job.
There is better news for women, fortunately, over at Legal & General, which has just appointed Michelle Scrimgeour, to run its investment management arm, the biggest in the UK with nearly £1trillion of assets. L&G now has four out of seven of its biggest divisions run by female executives.
It can’t be a coincidence that the boss, Nigel Wilson, has five daughters. He says he wants them, and other people’s daughters, to be treated fairly at work. Hear, hear. Doorstep wars THE hostile £1.3bn all-share bid for doorstep lender Provident Financial by NSF, a company run by its former boss John van Kuffeler, isn’t exactly a match made in heaven.
NSF’s share price has fallen heavily since its float, as Provvy pointed out – though rather cheekily it didn’t mention its own shares had done worse.
Provident’s move to delay its results announcement until mid-March also looks weak. If there was a glimmer of good news following the recent profit warning, the company would be in a rush to reveal it.
NSF’s offer has already received support from investors including Neil Woodford, who hold more than 50pc of the target’s share capital, so unless a white knight appears then it is almost certain to win the day. This takeover isn’t just about the interests of shareholders, however.
Provident Financial caters for poor and sometimes vulnerable borrowers paying very high interest rates.
Millions of Britons use these services so the competition authorities and financial watchdogs must keep a very close eye.