OUTLOOK: Corporate rules in hands of admen

A lot of nonsense is talked about corporate governance but none more so than in relation to the Saatchi and Saatchi fiasco. As far as David Herro, the Chicago fund manager who was instrumental in ousting Maurice Saatchi, is concerned, the former c hairman broke just about every corporate governance convention in the book. For Lord King, one of Maurice's defenders, it is the rest of the board that broke the rules by giving in to Mr Herro's demands. The former British Airways chairman reckons the du ty ofdirectors was to put Mr Herro's demands to a vote of shareholders.

For Stanley Kalms, chairman of Dixons, corporate governance appears to mean something else. For him directors' primary duty is to clients. Failure to consult the customer about the changes was the board's biggest sin. It was never easy to define good corporate governance with any clarity. Cadbury tried and largely failed. In practice it clearly means different things to different people. Plainly there is still as deep a divide in understanding between those who run and those who own Britain's publicly-quoted companies as ever.

Saatchi has provided the newspapers with a field day; rarely do you get such spectacular public mud slinging. Add in larger than life characters, big egos and a few household names and all the ingredients are there for a boardroom soap of apparently spectacular proportions. The commercial reality of the situation, however, is a good deal less dramatic than the headlines indicate. If this had been a packaging company of similar size, nobody would have given two hoots about the chairman's departure, stillless about the spectacle of other senior executives following him into a new venture. It would have been remarkable had the story commanded more than a day's space on the business pages.

But this is advertising and things just don't work that way in a people business. If there is going to be blood on the carpet it has to be suitably melodramatic. In the hands of the admen, corporate governance comes to mean just about anything you want it to.

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