Anthony Hilton: They may have passed you by, but these events show how things are changing

The themes and trends just below the surface are often what matter most

The significant events of a week or a year are seldom those which make an impact at the time. News is by its nature ephemeral and only rarely has lasting importance. What matters is often not noticed at all. These are the themes and trends just below the surface and often overlooked in the onward rush of everyday life which do indeed tell us something about the way we live and how it is changing.

This being the last column of the year here are a few of these events which as news may have passed you by but which do say a great deal about the pressures and the problems of today’s business world.

Regulators in the boardroom

The first is was the fact that KPMG partner Oliver Tant did not become finance director of Legal & General, the insurance group. He was by all accounts earmarked for the role, and on paper he looked ideally qualified for it. But the City’s regulator was unconvinced and this prompted the company to think again.

What this tells us is that in the financial world such is the power and influence of the regulators that they are in effect sitting in the boardroom alongside the directors. After the financial crash and the misbehaviour of the banks we might well say thank goodness for that. But is it really such a good thing? Business is about assessing risk and taking it in a controlled way to create wealth. Regulation is about trying to prevent things going wrong. The two make uneasy bedfellows and if our businesses become less creative, less dynamic, grey and mediocre it will be too a high price to pay for safety.

We are in danger of drowning in process. No one seems to care about outcomes anymore, provided the process has been flowed and no one can be blamed.

Taming Narcissus

Tesco’s stumble also tells us a lot about the world in which we live. The company, which accounts for one pound in every  12 spent by British consumers and for years seemed able to sweep all before it, is now on the defensive.

It made a costly mistake trying to crack America; the rest of its international business is not as profitable as it would like; it is losing market share in the UK especially to the discounters like Aldi and Lidl but most of all it has too much space. In effect, if 15 per cent of grocery shopping goes online there is 15 per cent of unused space in the stores.

The other lesson of Tesco is that all businesses come unstuck in the end. Tesco has long been noted for managerial arrogance where a powerful chief executive dominates all around him – including his chairman. Headhunter Anna Mann has just published a paper called Taming Narcissus, which warns of the dangers of successful chief executives getting above themselves, thinking they can walk on water and then over-reaching themselves. It ought to be required reading in every boardroom.

Emotion trumping reason

Another landmark was a report prepared by Sir John Armitt at the behest of the shadow Chancellor, Ed Balls, on how to take the politics out of infrastructure spending.

Sir John devised a system which was elegant in delivering certainty while recognising and retaining the need for Parliamentary accountability, but unfortunately, because it came from the Labour side, the Government refused to engage with it or its suggestions.

The inability of politicians to put the national interest before political interest in decisions such as high-speed rail, airport runways and nuclear-power plants reflects how society in general is losing the ability to discuss and decide upon complex issues, partly because information is now delivered in relatively glib sound bites, and partly because society has lost trust in the experts it used to rely on to guide it through such things. The result is that emotion scores more highly than reason in taking these complex decisions. How you – or the voters – feel becomes more important that what do you or the voters think.

Off balance

Finally we come to Mark Carney. Of the speeches he has made since his appointment as Governor of the Bank of England in the summer none is more significant than the one at a Financial Times anniversary celebration where he painted a picture of the UK economy even more massively dependent on financial services than it is now. “Forget rebalancing and embrace finance” was his message.

Banks, whose combined balance sheets were four times the size of the annual output of the entire UK economy at the time of the crash in 2008, could well be nine times that output by 2050 he said. We should be pleased about this, he went on, provided we successfully crack the “too big to fail problem” so there are no more Government bailouts

So, five years on from the financial crash which brought the economy to its knees, we are embarked on a course to become still more dependent on finance and in truth it will probably happen anyway, whether or not the “too big to fail” issues are resolved.

Whether the rest of the country agrees with Mr Carney that we should welcome such a development is moot. But he deserves our thanks for pointing it out while the politicians continues to stress rebalancing. In reality we are heading in quite the opposite direction.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Sport
Seth Rollins cashes in his Money in the Bank contract to win the WWE World Heavyweight Championship
WWERollins win the WWE World Heavyweight title in one of the greatest WrestleMania's ever seen
Arts and Entertainment
Louis Theroux: By Reason of Insanity takes him behind the bars again
tvBy Reason of Insanity, TV review
Arts and Entertainment
Cassetteboy's latest video is called Emperor's New Clothes rap
videoThe political parody genius duo strike again with new video
Arts and Entertainment
tvPoldark, TV review
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor