Sunday, July 17, 2016

What is a Company for?

J&J Credo
The move by the PM to give Investors a binding say on pay and to get workers on boards has attracted a backlash. But it raises the issue quite forcibly: What is a Company For?  My friend Charles Handy gave an excellent talk about this over 20  years ago at the RSA which led to the Tomorrow's Company work.

One major cause of the lacklustre performance of UK companies and UK productivity over the last 10 years has been the unwillingness of British management to focus on growth, innovation and exports: it's much easier to cut costs and do transactions to boost Earnings per Share and bonuses. Growing EpS and the Share Price is NOT and must not be the purpose of a Public company. Indeed there is a strong case for making the priveleges and responsibilities of a Public Company more explicit.

For example, and I offer this only as a thought starter, a new Companies Act might stipulate that:
The purpose of a Public Limited Company is to benefit society by supplying goods/services to customers, treating their customers, suppliers, employees and the communities in which they live and work responsibily and providing a fair return to their shareholders.
Naturally this responsibility can be discharged directly or through subsidiaries This is explicitly modelled to a significant extent on the famous Johnson and Johnson Credo which says their (fourth and) "final responsibility is to our stockholders."  This philosophy of putting the shareholders last has resulted in 10-year share price growth of 103% - well ahead of the S&P 500 (71%) or their rivals Merck (61%) or Pfizer (55%). Depressingly AstraZeneca and GSK have shown returns of 1% and -23% over that period. On a 20-year view JNJ is +421% vs 229% for the S&P, 221% for Pfizer 164% for AZ, 96% for Merck and 62% for GSK.

A corollary of this is that less than 25% of the remuneration of CEOs should be dependent on the returns achieved by shareholders. CEOs should be encouraged to grow their business and invest in R&D, skills, innovation and new markets, products and services.

The move by the PM to get workers on boards should be embraced by industry and not resisted. We don't want Union Representatives but there needs to be a genuine feeling that the Employee Directors are accountable to the Employees. Perhaps the NomCo should provide at least two canadiates for each vacancy and it should then be decided by a vote of the Employees.

Much to discuss and an exciting time to be debating these matters.

Friday, July 15, 2016

Lambeth Partnership in the Gardens

Lambeth Palace from the Gardens
To Lambeth Palace last night to for a gathering of the excellent Lambeth Partnership which support the Archbishop of Canterbury with prayer, skills and finance.

Justin gave an inspiring talk about his major priorities, and there is a very exciting initiative next Pentecost where there will be prayers for evangelisation in every European Capital City. The ministry of reconciliation which is one of Justin's main priorities has never been so urgently needed.

I was also very encouraged to hear that the first year of the Community of St Anselm had been a great success. The porter at the gatehouse said they were the nicest bunch of people he had ever met. The second cohort will be arriving in September (?or Oct) and they sound amazing too.

Slightly depressing to meet two FTSE 100 NED types rubbishing Theresa May's plan to give shareholders a binding say on pay. The first criticism was that it would make too much work for the NEDs - good grief, why don't they try acting responsibly and not giving outrageous pay awards for once?  The other two concerns raised had a bit more substance:
  • It would be better if these changes were accompanied by a thought through statement of how the duties of the Board should be adjusted, so that they were coherent and not tinkering.
  • Far too many shareholders outsource voting to ISS and similar agencies who excercise power without responsibility, represent a dangeour monopoly, and don't engage properly.
But outrageous CEO remuneration is not just a matter for the shareholders, it has serious implications for social cohesion and is a significant factor in the erosion of popular consent for shareholder capitalism.  People must act responsibly and reduce CEO remuneration over the next 10 years by 50-60% in real terms - which would more or less get us back to where we were 10 years ago when it was bad enough!  Easier said than done of course, but the PM is right to try and these "grandees" need to learn who's boss.

Tuesday, July 12, 2016

Idomineo + what a week!

Robert Murray, Timothy Robinson, Rebecca von Lipinski,
Toby, Louise Alder, Caitlin Hulcup, Nicholas Masters
Last night to see the wonderful Idomineo at Garsington starring Toby Spence. This was the first time I'd seen the opera and although it means I have missed a masterpiece I'm glad because I find it impossible to imagine a finer performance!

Toby drags Rebecca von Lipinski on in front of Container
I made a point of not reading the programme or anything else about the opera so it was all fresh to me. The set was essentially two containers on a wooden stage, one of which (see left) opened out to give interior scenes and one of which was at an angle and would contain prisoners - and later corpses.  This was all part of a remarkably effective production which remineded us that issues of prisoners and shipwreck are not purely historical, even though of course the idea of a human sacrifice made as a result of a vow to the Gods is no longer with us.

We were treated to captivating and excellent performances from  Louise Alder as Ilia (daughter of King Priam and capitve on Crete), Caitlin Hulcup as Idamante (son of Idomineo King of Crete, in love with Ilia) and Rebecca von Lipinski as Elettra (refugee on Crete - though I can't find any classical allusions to this!) and then Idomineo arrives washed up on the shore having surived the storm by promising Neptune that he would sacrifice the first living thing(?person) he sees on arrival - only to meet his son Idamante. Toby was beyond brilliant in this demanding title role - singing and acting superbly throughout and inspiring the whole cast to even greater heights.

Toby very kindly joined me in the restuarant tent at the end of the Interval supper and explained that the highly intelligent conductor, Tobias Ringborg, had done an excellent job of cutting the material so that the whole thing flows in a really dramatic manner. The entire published score including the Anhang (Appendix) runs to 379 pages and would, uncut, "result in an evening of Wagnerian length".  He said that every performance he felt the cast had got even better. And he told me that this was the opera of which Mozart was most proud - he carried it with him everywhere and it was deeply personal since it speaks of how a tyrannical father sacrifices (or nearly) his son somewhat in the way that Mozart's own father did - not least in sending him away to perform in Paris and thus missing the death of his mother. I'm also delighted to learn that his next engagement is singing Ottavio in San Sebastian with Nicole Cabell as Elvira!

The final Third Act was indeed even more magnificant and shattering than the previous ones, as Toby had suggested. Robert Murray (Idomineo's friend), Timothy Robinson (Priest of Neptune) and Nicholas Masters (as Neptune) all performed excellently. And Elettra's use of knives for self-harm rather than suicide was a very good touch, as was giving her her truly - er - electrifying final aria from the Anghang.

Travelled back on the train with some other opera-goers. And much enjoyed some of the biographical notes, not least that James Gilchrist (who is singing in The Creation later) "Enjoys listenting to The Archers and open water swimming, the latter due to his limited success as a sailor"

I am of course delighted that Theresa is to be PM and that Andrea Leadsom has withdrawn. I emailed her on Thurday saying "Congratulations - but now as a Christian please consider prayerfully stepping aside" and it seems I may not have been alone. Let us hope and pray that Theresa makes a great PM in these very challenging times.

Thursday, July 07, 2016

Royal Society and David Cameron

Sarah-Jayne Blakemore, Sunetra Gupta
Francesca Happe, Zita Martins
To the Royal Society last night for their Soiree at their Summer Exhibition. It was great to see some old friends and to meet some new people, as well as to look at some very interesting exhibits.  I was especially impressed with:
  • CANBUILD: deconstructing cancer an attempt to build 3 dimensional models of tumors - since in fact tumors are not all composed of cancer cells and have a fascinating 3D structure.
  • The comet revealed: Rosetta and Philae at Comet 67P which had a fascinating 3D VR image of the comet including a simulation of what it would be like to stand there (except that the colour has been turned from a sooty black to a whiteish gray).
  • 4D science which is about using the Diamond X-Ray source for X-Ray tomography to investigate the behaviour and structure of materials as diverse as Ice Cream or bones.
Standing Ovation for Cameron
Then today to a big lunch with David Cameron making one of his last big UK appearances as PM. He gave an excellent speech:
  1. Be proud of the good things achieved. Not everyhing has gone right but much has.
  2. We've just got to make the new situation work. He was and is concerned about the economy and the future of the UK, but we must get on with it.
  3. We must remain friends with, and engaged with, our EU neighbours.
  4. We must remain the party of enterprise, since a strong economy is vital.
  5. We must remain a modern compassionate party.
  6. Unity is vital, it's a team enterprise.
It was great to see him and thank him again as PM.

Monday, July 04, 2016

Wonderful Werther with Joyce

Joyce takes great selfies
Yesterday to a completely wonderful performance of Werther at Covent Garden starring Joyce DiDonato and Vittorio Grigolo. Musically, and in terms of acting, it is hard to imagine that there could have been a better performance.

I was very tired after the Round the Island race the previous day but the performance was utterly gripping, and the climax was some of the most heart-rending opera I have ever heard. Joyce inhabits the role so convincingly and sings so expressively - from ppp to fff and with the whole gamut of emotions.

Vittorio Grigolo was also superb, and Jonaan Summers made an excellent father. The revelation of the performance was Heather Engebretson who played Sophie the younger sister. She's pint-sized but a bundle of energy with a superb voice that can fill Covent Garden. She'd doing a lot of work in Germany (Wiesbade, Hamburg) catch her if you can. And I hope she'll do a Wigmore soon!

It occurred to me that Joyce is a bit like Judi Dench - people always perform a notch or two better when they perform with her. She liked the comparison.

Sunday, July 03, 2016

What a week - finishing with Round the Island

 What an extraordinary week!

The Conservative Summer Party on Weds was a fascinating affair. I spoke to all the then supposed leadership contenders and, mainly to reassure my Chinese clients considering investment in the UK, got "selfies" with a number of them. David took the one on the left which is good of him and one of the worst ones of me I've ever seen!
Notwithstanding my previous post it's clear to me that Theresa May - who I know only a little but like a lot - should be our next PM. She is by far the best placed to steady the ship and bring the country and the party together, and to lead discussions with Merkel and others on finding a sensible way forward.  I was very impressed by her leadership speech and I hope and pray that the Conservative members have the good sense to elect her.

Stephen Crabb would be an excellent successor when the time comes, and there are of course other possibilites. Boris has done the right thing to stand down as a candidate - he really couldn't have done it.

I should also mention that we went to the Dr Faustus which turned out to be a modern "adaptation" with most of the text by a contemporary playwright.

And I did my first Round the Island Race which was spectacular!