City: Paul's vision

MANY years ago when Sir Austin Bide was still chairman of Glaxo, directors of the group's Italian subsidiary wrote to him saying they would resign if head office went through with plans to appoint a new managing director of whom they disapproved.

'What should I do about it?', Sir Austin asked his then chief executive, Sir Paul Girolami.

'Sack the lot of them,' Sir Paul replied without a moment's hesitation. And they did.

This true story was being much told at City lunch tables last week as Glaxo's chief executive of four years' standing, Dr Ernest Mario, became the latest victim of Sir Paul's legendary ruthlessness. Dr Mario's predecessor, Bernard Taylor, departed in very similar circumstances. Along the way, Sir Paul has also disposed of two or three finance directors.

In normal circumstances, Sir Paul would probably have taken the latest boardroom upheaval in his stride. Glaxo has become such a successful company under his rule that he could have done almost anything and the City would still have loved him for it.

Circumstances are not normal, however. Dr Mario's departure has coincided with an unprecedented period of confusion and concern in the City over Glaxo's future direction. Its shares have underperformed horribly over the past six months, undermined by rumours of dramatic shifts in strategy, criticism for overly aggressive marketing, and doubts about prospects for Glaxo's blockbuster anti-ulcer drug, Zantac. If Sir Paul's intention was to make Dr Mario a scapegoat for all this, it backfired badly. If anything, Dr Mario's departure has only heightened the concern.

Is this fair or is Sir Paul being misjudged? He certainly shares much of the blame with Dr Mario for the way Glaxo has been overhyped in recent years. It was after all Sir Paul, not Dr Mario, who said two years ago that Glaxo's three most promising new products would by mid-decade be as successful as Zantac, a prediction that now looks like little more than a pipe dream. But if Dr Mario had got his way, Glaxo would have embarked on some totally inappropriate strategy of acquisition to take it into the over-the- counter drugs market. Such a course might have plenty to commend it, but it is not the formula that has made Glaxo a success.

Glaxo is a research-based prescription drugs company and Sir Paul is making it abundantly clear in the wake of Dr Mario's departure that he is going to keep it that way. The City would be unwise to push it down alien avenues. Why not just let Glaxo get on with what it is good at? As for Sir Paul, he surely deserves the benefit of the doubt after all he has achieved. Dr Mario is a great enthusiast but he was never at ease in British corporate life; he never really moved to London in the first place, preferring to keep his main home in the US. It was he who became the odd one out at Glaxo, not Sir Paul.

Like most great entrepreneurial achievements, Glaxo is largely one man's creation, one man's vision. While Sir Paul is still there, there is never going to be a real challenge to his authority. Nor should there be, unless he begins to foul up on a major scale. Given his track record, there's not much reason to think he is going to do that.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there