Executives must not lord it over politics

BARONESS Harding of Winscombe told this newspaper she accepted a role as a working peer in the House of Lords in order to make the internet safer for children.

Her version of her appointment as an altruistic mission to protect kids from adult material online and to push the debates about cyber security and internet freedom is not quite how Dido Harding’s critics see it, however.

Harding’s status as a Conservative peer – she also happens to be married to a Conservative MP – cuts to the heart of the debate about business and politics.

In particular, it raises the difficult question of whether public companies and their executives should involve themselves in party politics.

The TalkTalk boss is a plainspeaking woman who has not held back on her views, such as her opinion that BT ought to be broken up with its infrastructure division Openreach being spun off.

She is entitled to speak out, but her position in the Lords since her elevation in October last year, makes her rivals fear she may misuse her position to plug her own corporate agenda at their expense.

These accusations may be sour grapes and they are certainly not objective, but there are genuine misgivings that apply to Harding’s position, as indeed they would to any serving chief executive who is also a working peer.

The first is the simple matter of time. Being the chief executive of a major listed business is more than a full-time job in itself, so how to add on the responsibilities of the red benches?

Second, what happens when a conflict arises between party policy and the interests of a firm’s shareholders and customers? This has not happened so far with TalkTalk, but it is easy to envisage a situation where this could occur.

Sunderland

A recent one is the minimum wage, which would have put a working peer who was also, say, a supermarket or care home CEO, in a tricky position because firms in those sectors claim their business will be damaged by the measure.

There are also perceived conflicts of interest when something goes wrong at a company and Parliament wants to investigate, as has happened at TalkTalk.

Harding is expected to come in for questioning by the Culture, Media and Sport Select Committee in the Commons. Her party alignment opens up all manner of questions: might she be given an easy ride because she is a Tory peer? Conversely, might the committee be unduly harsh, to avoid slurs on its independence? If a Labour MP had been in the chair, that person’s impartiality could equally be called into question. Just imagine if any of the big bank bosses called in front of the Treasury committee had been working Tory (or Labour) peers, and the field day that would have been had.

The case for appointing Harding and others like her, such as Next boss Lord Wolfson, is that there are far too few in politics with real business experience, and those that have are usually retired and out of touch.

The importance of the digital agenda to society means that her experience is invaluable – though she could use her influence in other ways, for instance, through industry lobby groups.

Thinking on corporate governance and political activity is evolving. A couple of decades ago, it was par for the course for large companies to make substantial donations, usually to the Tory Party. Nowadays this would be

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pretty unusual, as most corporates prefer to remain politically neutral. The mainstream thinking is that companies should not seek to impose their views or influence on employees or customers. This idea has been absorbed to the point where most executives are reticent even when there are clear threats to jobs and the economy, as with the referendum on Scottish independence.

The idea that companies, and those who run them, could, or should, stay totally out of politics is not feasible. Now the Scottish issue is settled – for the moment – business is being pulled into the arena over the Brexit referendum.

On issues like this, the voices of business people are important and need to be heard. But individual chief executives should concentrate on their shareholders, customers and staff. Dido should have resisted the temptation of taking the ermine robes.

Henri at HSBC

WINNING the services of AXA chief Henri de Castries as a nonexecutive is quite a coup for HSBC.

He is one of the most powerful and best-connected financiers in Paris, which could come in handy considering HSBC’s worrying out-loud about the impact of a Brexit on its operations on the continent, and its European passport for financial firms.

Top brass – suspected of plotting a flit to Hong Kong – have also previously mused about the possibility of a move to France, where it owns Credit Commercial. What a fascinating appointment.