There was thin praise for Paul Massara when his exit as chief executive for RWE Npower was announced this week. The energy provider’s German parent thanked him for moving the company up “from 6th to 5th in customer service”.
The problems Npower faced – and the reason for Mr Massara’s exit – lay in the failure of the IT systems used by the company to invoice customers.
But at least its retail arm made a profit, albeit just £38m in the first half. By contrast, the group’s electricity generation division, which includes Aberthaw power station in South Wales and Staythorpe in Nottinghamshire, continued to show a loss as the whole industry gets hammered by low wholesale prices. The weak numbers capped a forgettable few weeks for RWE, whose renewables arm had plans for a £120m windfarm in the Cairngorms rejected too.
In its investigation of the energy market, the Competition and Markets Authority has already ruled out the break-up of the biggest providers after finding no evidence of collusion over prices. Instead, the CMA said that consumers were paying too much for their energy because they were not switching supplier enough.
But if regulators aren’t forcing restructuring on the industry, the main players appear to be doing it themselves. E.ON is spinning off its conventional power stations and nuclear operations so it can to focus on retailing energy and renewables, while Centrica intends to dispose of some of its exploration assets to focus on consumers as well.
Of the big six energy suppliers, four have foreign owners. I wonder how long before some of them decide that in straitened times they would be better focusing on fewer countries as well as fewer activities. The Energy Secretary Amber Rudd is applying more pressure over prices, and incentives to invest here in new power plants are limited.
RWE has already offloaded some UK assets this year: the North Sea oilfields wrapped up in a division controversially acquired by the Russian tycoon Mikhail Fridman. The disposal was explained away by the utility’s need to lessen its debt burden. The German company insists the UK remains an important market for it, but you have to wonder for how much longer.
Regrets? He doesn’t have many now
When I interviewed Stephen Hester last year, he told me the best piece of advice he had received in his business career was that you almost always only regret the things you don’t do – or don’t do quickly enough.
Against that yardstick, Mr Hester can have no regrets about leading the insurance group RSA, which has occupied him for barely 18 months, and won’t for much longer after the board agreed this week to recommend a £5.6bn offer from rival Zurich to shareholders.
The question arises: what next? Mr Hester has a rare mix of skills, having run Royal Bank of Scotland with a stint in property at the helm of British Land thrown in for good measure.
Few leaders can resist the next big challenge, but I suspect he will take a well-earned break when the Zurich deal has closed and a handover has been done. When he dashed into the RSA job, Mr Hester harboured a regret: the keen gardener had to scrap a Chinese horticulture tour.
BBC Worldwide should be in the thick of it
Armando Iannucci was on to something when he said in a speech at the Edinburgh International Television Festival this week that the BBC shouldn’t be so “icky and modest” about making money overseas.
I agree less with the brains behind the The Thick of It and Veep that ministers don’t champion our creative industries abroad. It happens involuntarily, as David Cameron found when he was quizzed on one trade mission about how soon Sherlock, starring Benedict Cumberbatch, would return to Chinese TV screens.
But what is clear is that cutting the BBC, the organisation at the centre of this industry, down to size is an odd move if the broader industry is to flourish. If money is short, there should be more focus on supplementing the licence fee with what BBC Worldwide, the corporation’s commercial arm, can earn abroad.
At the moment, its brand means it does quite well by striking partnerships. That was once a natural-history alliance with Discovery to fund ambitious documentaries. More recently, a stake in BBC America was sold to the Breaking Bad broadcaster AMC to give it more Stateside clout. But Worldwide is hamstrung because it is not allowed to borrow more than £350m – barely the price of three CGI-heavy movies in modern media spending.
Mr Iannucci talked about “displaying the arrogance of our convictions” in exporting BBC programming and formats more aggressively. A sensible step would be to give Worldwide more freedom so it can speculate to accumulate.
Boardroom independence is up in the air
An odd trend seems to be developing. Ryanair welcomed a new non-executive director this week. Howard Millar already knows his way around the boardroom, having spent 11 years at the budget airline as deputy chief executive and then finance director until he retired last December.
Two days later, an even quicker switch took place. The finance director of photo booths operator Photo-Me International, Françoise Coutaz-Replan, tendered her resignation from an executive role but declared that she would carry on in a non-executive capacity. Continuity is good in any business, but what about independent scrutiny? The time that the boardroom was an old boys’ (or girls) network is supposed to be long past.Reuse content