Bouncing back?
What a latterday Prospero is Alan Greenspan, chairman of the US Federal Reserve. With a wave of his wand he dispels the financial storms and spreads amnesia around the financial community over the troubles in Asia and elsewhere. The result is a new lease of life for an ageing bull market. The folk in London and Wall Street have thus returned to their favourite pastime: extracting huge fees for marriage broking around the corporate sector.
The most impressive of these proposed marriages is between Exxon and Mobil, which re-assembles what the US anti-trust authorities had torn asunder in the days of John D Rockefeller. It is a reminder of just how durable, in the course of this century, has been the tenure of big oil at the top of the corporate league tables-despite the efforts of the regulators.
General Electric, which vies with Microsoft for the title of the world's biggest stock market capitalisation, was also one of the giants, alongside Rockefeller's Standard Oil, at the start of the century. But unlike Exxon, GE has completely changed its spots, having conglomerated itself out of mere electricity into aerospace, financial services and goodness knows what.
In contrast, the oil giants' attempts at diversification have failed. Yet the black stuff continues to provide a good living. How lucky for the Exxons, Shells and BPs that industrialisation-a story which runs and runs-is so energy-intensive, and that exploration and refining are so capital-intensive. The barriers to entry give a huge advantage to those who dug their wells first. Yet the game is growing tougher. A collapsing oil price forces the giants to focus on cost-cutting as much as on revenue generation. And that is the rationale for much merger and acquisition activity.
Too many cooks at Barclays
For bosses, unlike oil companies, life is becoming tougher and shorter-witness the departure of Martin Taylor from Barclays after five years, when he had been expected to hang on for ten. His departure demonstrates, once again, that wonky corporate governance is a sure sign of trouble ahead.
Not only did this chief executive have to cope with an executive chairman, Andrew Buxton, but Buxton also insisted on appointing an executive deputy chairman, Andrew Large, Britain's former chief financial watchdog. Large had to look around for ways of justifying his existence and his pay, which inevitably involved second-guessing Taylor.
With too many executive cooks around to spoil the broth, Barclays also had some pro-active non-executives of the kind that most businessmen would fight tooth and nail to keep out of their boardrooms. Most notable among them was the former Treasury mandarin Peter Middleton, who acquired notoriety at United Utilities for leading a putsch against Desmond Pitcher. He is now temporarily filling Taylor's shoes at Barclays.
Middleton's activism was amply justified at United Utilities and British industry could do with a few more gutsy non-executives. But it is unfortunate that Middleton and the other non-executives at Barclays permitted a structure at the top which ensured that everyone was bound to tread on everyone else's toes. With immensely difficult strategic choices to face up to, this once great bank needed clearer lines of authority and decision-making. In the circumstances it would have been amazing if Taylor had gone the full stretch.
Greenbury versus Cadbury
The same point about corporate governance could be made about Richard Greenbury at Marks & Spencer. Here is a man who has presided over a near-40 per cent collapse this year in the share price of Britain's most admired retailer. He also combines the roles of chairman and chief executive.
Greenbury is part of the history of the corporate governance movement thanks to his seminal report on directors' pay. It must be said, however, that his report has failed to prevent boardroom rewards racing ahead of corporate performance. In the meantime he has chosen to flout the advice of Adrian Cadbury about doing more than one job. Cadbury's earlier report on corporate governance warned against the over-dominant chief executive.
Chairmen and chief executives do not come much more dominant than Richard Greenbury. Furthermore, he has famously bungled his own succession by allowing a boardroom row on the subject to bubble over into the public domain just when his company's performance has been going downhill.
There are circumstances in which combining the roles of chairman and chief executive may be justified. But in most cases the decision to take on both roles is a matter of hubris. Arrogance has certainly been the hallmark of Greenbury's reign at Marks & Spencer. And no one whinges more furiously at the merest hint of criticism-not least about him occupying the two top jobs at M&S. Many in the City would be delighted if his already shortened tenure were to come to an end here and now.
Bill Gates and charity
Bill Gates of Microsoft has been talking about giving his billions to charity. If the US Justice Department fails to nail him for monopolistic behaviour, he will be in the happy position of being able to do so from his own pocket.
For those in charge of rich companies, but with more slender personal means, the rules on corporate charitable giving were pithily set out by Lord Justice Bowen in 1883. "The law does not say that there are to be no cakes and ale, but there are to be no cakes and ale except such as are required for the benefit of the company." A seasonal thought.
