Kay and ICI lock horns on policy

John Kay, an arch-proponent of the stakeholder philosophy and an adviser to Tony Blair, was at loggerheads with ICI yesterday after he accused the chemicals group of putting profits above the interests of customers, employees and local communities.

Professor Kay, chairman of London Economics, said that ICI, chaired by Sir Ronnie Hampel, who also heads up Cadbury II, had changed its business strategy after the abortive takeover attempt by Hanson to one that "acknowledges no claim other than that of shareholders".

He went on to compare its approach with that of Marks & Spencer, which was successful because its commitment to employees and customers was not a policy of the board but a characteristic of the very company.

Professor Kay said that in 1986 ICI's stated objectives were to "enhance the wealth and well-being of our shareholders, our employees, our customers and the communities which we serve and in which we operate" through innovative and responsible application of chemistry. After the Hanson bid its objective instead became to "maximise value for our shareholders by focusing on businesses where we have market leadership, a technological edge and a world competitive base".

This change of tack, Professor Kay said, was the product of a "deformed style of capitalism" which, far from underpinning the market system, would bring it to its knees. But ICI said it had devised a fresh set of objectives and mission statement since Charles Miller-Smith took over as chief executive a year ago.

This says: "Our vision is to be the industry leader in creating value for customers and shareholders." This would be achieved by, among other things, "inspiration and reward of talented people, exemplary performance in safety and health and responsible for the environment".