Rebranding a company is never easy, especially a family firm that has been around since 1804. But surely there’s an obvious next step for Schroders: renaming the whole thing Dobsons, a tribute to the man it can’t live without.
A bit far-fetched? Not when you see Schroders bending over backwards to accommodate Michael Dobson, the £8 million-a-year chief executive now stepping up to chairman in contravention of Britain’s corporate governance code. No question, he has done a top job, turning the loss making business he joined in 2001 into one delivering yesterday’s record full-year pre-tax profits, up 14 per cent to £589 million. But his elevation is both chummy and hypocritical. How can Schroders, steward of £314 billion of other people’s money, ever throw the governance rule book at a company again?
Yes, rules can be broken, but only in “exceptional circumstances”: not the case here. Indeed, Schroders’ justification is that Mr Dobson brings “continuity and stability” — by definition unexceptional. Marks & Spencer argued something similar in 2008 when it made Sir Stuart Rose executive chairman, a move that set “an appalling example”, so Schroders said at the time. It’s not quite analogous but, since then, Schroders has voted against chief executive to chairman switches at Experian and Cairn Energy, while abstaining at SAB Miller. It did back Douglas Flint’s move from HSBC finance chief to chairman, since when the shares have fallen a third.
Schroders is not a conventional FTSE 100 company: it’s 48 per cent owned by the family, whose main representative, Bruno Schroder, has been on the board for 53 years. Yet that makes it more important to have an independent chairman holding the executives to account. Instead, it’s got a man who can hardly be objective, having run the show for the past 14 years.
It gets worse. Mr Dobson will be “reviewing the composition of the board” and leading a search for new non-execs, so strengthening his grip on the business. And the reason he’s getting £625,000 a year fees, almost double the £325,000 paid to his predecessor Andrew Beeson, is because he will continue to do client and investor meetings. Schroders can’t have it both ways. Either Mr Dobson is hanging on to duties that are now more properly the domain of his succesor Peter Harrison or Mr Beeson only did half his job. One other thing tells you Schroders remains the Dobson show: no one else was interviewed for chairman.
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Riding for a fall
Budget day looms. Not that anyone in the City will be paying much attention. More fool the chancellor for picking March 16 and trying to upstage the Cheltenham festival. Still, at least he now knows how ante-post punters feel, tearing up their betting slips even before a race is run. George Osborne must have hoped at least one of his PMIs would get to the course without looking knackered. Sadly not. February’s construction survey was the worst for ten months. Manufacturing trounced that: the lowest level of activity for 34 months. And now the biggest beast, services, has gone one better: the lousiest performance for 35 months.
The PMI form book can be misleading. But it’s hard to avoid one conclusion: Mr Osborne will need his full armoury of smoke and mirrors to pretend his autumn statement forecasts are on track. True, as Berenberg economists pointed out, “the real problem for the UK is not fundamentals”. There’s decent domestic demand, low unemployment, cheap oil, low interest rates and moderate real wage growth. Yet, the chancellor’s budget assumptions are being undone by global threats, such as a slowdown in his beloved China.
Even so, his party has added one all of its own: Brexit. It’s seems to be showing up in the PMI figures, even if those same Cheltenham bookies still rate it a 5-2 chance.
Threepenny opera
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Call it the George Clooney/Amal Alamuddin defence. If you’re as rich, handsome and famous as grey locks you do have a bit better chance of hooking up with an attractive human rights lawyer. If, on the other hand, you’re skint, your options do come down a bit.
It’s a concept Brian O’Cathain is yet to grasp, at least to judge by the latest missive from the scuba diving aficionado who doubles up as Petroceltic’s chief executive. He has (belatedly) responded to a 3p-a-share offer from Worldview Capital Management, the hedge fund he has been at war with ever since it bought 29 per cent of the oil group at around a suicidal 160p. And it’s an absolute classic. “The board believes the offer undervalues the company on the assumption of its having long-term funding in place.”
Yes, Petroceltic could be worth more than the £6.42 million Worldview is offering if it wasn’t $218 million in debt and dependent for survival on its banks. Mr O’Cathain has found it impossible to “give a firm recommendation”. But the shares fell a third to 6.81p. That 3p offer gets better by the day.
The human touch
If only the technology had been around ten years ago. Royal Bank of Scotland has successfully piloted “Luvo”, some artificial intelligence chappie capable of responding to such things as: “My customer has lost their card — what steps do they need to take now?”
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Imagine how Luvo might have got on with: “My boss has bought a Dutch bank. Should we keep selling its junk products to Americans?” RBS says Luvo “is unique in that a ‘human’ like personality has been created for it that makes it easy for people to interact with”. Can’t say the same about some bankers.