CITY AND SUBURBAN
Potted plants on show at British Airways and the Bank of England
CHRISTOPHER FILDES
Some boardrooms have potted plants in them and some have non-executive direc- tors. The question in either case is: are they there for use or for ornament? Some prize specimens are on view just now, at British Airways and at the Bank of England. The non-execs travelling first class aboard King Air were slow to see that something was wrong, slower to realise that they might uave to do something about it, and slower still to cross their crusty chairman. They vainly hoped to park the blame outside the Brian by firing its combative publicist, urian Basham, and hiring Sir Tim Bell, a combative publicist. They finally got them- selves roasted by Lord Hanson, who, as an old friend of Lord King and no great friend of non-execs, thought they should have stood up for him. Even so, they made themselves look more useful than the 12 non-execs on the Court (no mere board) of the Bank. It so happens that corporate gov- ernance is one of the Bank's good causes. Its senior non-exec, Sir Adrian Cadbury, chaired the committee that wished non- execs on every board and told them what to do, such as appointing each other. Now the Cadbury code has been tossed out of the Bank's window.
Cadbury smashed
SIR ADRIAN thought (and the present Governor has said) that it is best for a com- pany chairman not to double as chief exec- utive. The next Governor, Eddie George, is now the Bank's chief executive and will surely carry on — at least until his new Ly, now editing a magazine, completes his on-the-spot training. That appointment was thrust on the Bank without reference to its directors. Their predecessors once persuaded an earlier Chancellor's choice of Governor that he was not up to the job. In those days the Bank's directors had some- thing to say about policy. Later, Lord Richardson, as Governor, told the Wilson committee that he took their advice about catering, (Allowed a second answer, he came up with something more fulsome.) The three new directors now due on board should ask for a job specification. A non- exec's ultimate sanction is to resign, and at British Airways Lord White did just that, but at the Bank it has not happened for a generation, and if not now, when will it? Perhaps the trouble lies with the fees, unchanged since 1946 (Cadbury said that non-execs should be paid properly) at a nominal £500 a year. If you pay fertiliser you must expect to get potted plants.
A draft on memory
SIR Jeremy Morse leaves Lloyds Bank on a high note. The results, out this week, for his last year as chairman will put Lloyds at the top of the Big Four, for the second year running. I shall miss that formidable and deeply-stocked mind. I think of him at the party he gave in the bank for the centenary of T.S. Eliot. Like Sir Jeremy, Eliot wel- comed the routine of banking, and was working for Lloyds in Cornhill when he wrote The Waste Land, with its haunting images drawn from the City. Sir Jeremy began to read from it:
A crowd flowed over London Bridge, so many I had not known death had undone so many
He checked for a moment and continued, and I thought, hearing him, that there was something not quite familiar about his text. Was this a draft rediscovered in Lloyds's archives? No — but Eliot's words had moved Sir Jeremy to tears, so that he could not see through his glasses. He had finished the poem from memory.
Talking horse . . .
IF MICHAEL Portillo were a horse, he would be a promising novice, backed down to a false price for the Gold Cup. Good for the bookies, not so good for the punters, no good for the horse. One like that got stuffed at Sandown the other day at 15 to 8 on. The next day a poll (or trial Gallup) made Mr Portillo favourite for the Lamont Succession Stakes. His supporters cannot be said to be betting on the form book. They have seen him in action as Chief Sec- retary for ten months. There, his job is to control public expenditure, bargaining and battling with the big spending departments in the annual review, whose results come out in the autumn. Last year's review, his first, ended in disaster — not a single sacred monster knifed, pious hopes pinned instead to a public sector pay squeeze, and £44 billion of borrowing needed to pay the bills. Now he is trailing fundamental reform and cuts which will amaze us, though not yet. In any case, when the Succession Stakes comes up, I do not want to back a horse from the Treasury stable, which has been out of form for so long. The Prime Minister before his elevation had spent almost all his Cabinet life there. Norman Lamont has been there for seven years and is in his third Treasury job. It is not surpris- ing that they run true to form, but I would look somewhere else for a winner.
. . . slipping pound
MR PORTILLO'S promises of sound finance in the next Parliament could not, in the event, save the markets from a wonky week. The pound is sliding towards $1.40, and the two-dollar martini, so vivid only last September, is now a fantasy's ghost. Nor will historians lightly believe that this Government then got itself into a sterling crisis with the pound, as measured against the world's most important currency, at its highest for 10 years.
Print the legend
THIS week the Independent gains a new financial columnist, Jim Slater. Well, not as new as all that, for his heyday at Slater Walker was before the Independent's time — which may be why his paper calls him a legendary stock-market guru, explaining that he will from time to time tip shares that meet his demanding criteria. They would not demand much, of course, to out- perform the Independent's City editor, whose selection for last year would have lost his readers every penny they put into it. Now he tells us that Mr Slater will write on the principles and practice of investment and, certainly, no one knows the difference better. One principle might be the text for an instructive column: where there's a tip, there's a tap.
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