BP's choice of Carl-Henric Svanberg as its new chairman is as inspiring as it is exciting. You can't fault the logic of BP's board in choosing a Swedish engineer with such formidable international experience of the telecoms industry.
Svanberg doesn't join until September, yet has already been delightfully frank about the big issues facing us, warning that 2 billion more people on the planet over the next few decades will put such strains on energy reserves that finding intelligent ways to use them is imperative.
All this is heartening for BP, and for us too – as shareholders or consumers. But Svanberg's appointment doesn't say too many good things about British management. It's worth asking again why BP took two years to find itself a chairman, why at least six other FTSE 100 firms are struggling to find chairmen who can make the grade, and why 38 of Britain's top 100 bosses are also from overseas.
So the first question is whether the British are just lousy at being good managers, or indeed, leaders (although we do seem to produce good Army officers). I have a niggling feeling that as a society we don't value management skills, that being a manager is not given the status it deserves. It's interesting that many of the overseas chief executives and chairmen who do run our big companies are Europeans, many with engineering backgrounds, topped with MBAs. Nearly all of them have worked overseas and it's also worth noting that 80 per cent of the Brits who have made it to chief executive have also worked abroad.
The second question to ask is whether our bosses are simply bad at succession planning – whether it be grooming successors as chief executives or nurturing non-executives on boards to step up to the chair. You only have to look at the constant rows at Marks & Spencer over the past decade over who was going to succeed whom to see how dangerous it is not to get the succession issue resolved properly.
Another reason there appears to be a shortage of talent at the top of corporate UK is that many of our best and brightest have over the past two decades chosen careers in the City or, dare I say it, in media rather than industry, partly because rewards are greater and pressures are less. Being in the spotlight of a public company in today's recession-ravaged world must be tough, but worthwhile if the rewards are right, and the right status given to the job.
It's impossible to know precisely why there is such a dearth of talent. But clearly there is a problem otherwise there wouldn't be head-hunters chasing around the world to find new chairmen – or women – for these top companies. Boards must start paying more attention to succession, and help train those that they do spot. Grooming people internally is vital for a company as it gives motivation to other staff, as well as providing cultural continuity.
As our story on Lloyds shows, the hunt to find a replacement for Sir Victor Blank when he goes next year is getting rather desperate. Other companies on the hunt for new blood include Legal & General, Anglo-American, Marks & Spencer and Standard Chartered. Perhaps they should follow BP. There is an old saying in the north; what Sweden does today, the world does tomorrow.
King vs Darling: Shocking revelations and staggering spin
I make no apologies for returning to the subject of Mervyn King, the Governor of the Bank of England, and his tussle with Alistair Darling, the Chancellor. King's testimony to the Treasury Select Committee was another example of his singular determination to resist this Government's attempts to play politics with the future of banking regulation. The Governor's revelation that he wasn't consulted on the White Paper on financial regulation, which has again been delayed, was shocking. More staggering, though, is the spin that King wasn't given details in case he leaked them to the Tories, who agree with him that more powers should go to the Bank, rather than the FSA. This is not only a flaky response but flawed. For one, I just don't believe that King would do such a thing. And, anyway, what possible advantage would it give them? You couldn't make it up.
Where there are bankers there will be bonuses – and that's guaranteed
I'm amazed that the news that Bonuses are Back – or BAB as it's being dubbed – has surprised so many people. They should know better. Bonuses are as much a part of a bankers' DNA as their tasselled loafers. It should have been obvious that the minute trading and investment banking got going again, so would the bonuses and, more controversially, the guaranteed ones. Over the past few months most of the big players – from Barclays Capital and UBS to Goldman Sachs – have been out hiring aggressively, seducing staff with massive guaranteed bonus as if the past eight months never happened.
One of the first off the mark to reintroduce guaranteed bonuses was Royal Bank of Scotland, while its new chief executive, Stephen Hester, has caused a mini-stir with his £9.6m pay package. You may disagree with how much Hester is being paid but at least he's got to get the share price up before he gets his reward.
Like it or not, bankers and traders will always pay themselves on some sort of variable formula if they are left in charge of setting their own pay levels. There is nothing inherently wrong with bonuses – so long as they are fairly structured. And that's the real issue which still needs proper discussion. As we have seen all too clearly, the way bankers have been paid over the past few decades became deeply corrupted. Incentives for traders were geared to highly leveraged deals, chief executives were encouraged to do M&A deals to boost their share prices, mortgage-brokers were 'incentivised' to sell teaser mortgages and so on.
This pay debate is easy to resolve. Shareholders in the banks can say 'no, we don't want to pay so much', or they can demand that pay scales be changed. Ironically, the Government, now the biggest investor in Lloyds and RBS, has a wonderful chance to set an example by suggesting RBS drops the guarantees. But it won't. It's too scared.Reuse content