So did Mr Robinson go from paragon to fiend?

City & Business
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SPRING is in the air, and the businessman's mind turns naturally to ... gardening. You know the hell it can be: the weeds are sprouting, the roses need pruning, and the lawn could do with its first trim of the year. Where can the busy executive turn if he can't be bothered to do it himself but doesn't want to shell out for anyone else to do it? Easy: get the shareholders to foot the bill.

The Saatchi brothers blazed the trail here. For a while the gardeners at the private homes of both Maurice and Charles were employees of their then-public company Saatchi & Saatchi. Now it seems that their unorthodox views on the proper home for shareholders' funds has found an enthusiastic convert in the sleepy world of building societies.

Last week Peter Robinson, the flamboyant chief executive of the Woolwich, was ignominiously fired amid allegations that he used Woolwich resources for his own private gain and accepted gifts from suppliers. Among his alleged sins was that Woolwich staff were employed to work on his garden in Brasted, Kent.

We don't know the full facts yet. Mr Robinson denies any wrongdoing and this weekend accused the Woolwich of orchestrating a smear campaign against him. Lawyers Linklaters & Paines and auditors KPMG are conducting a full investigation for the Woolwich. It may or may not be published.

But if only a fraction of the allegations are true, Mr Robinson was bound to be found out. His alleged transgressions were an open secret at the head office in Bexleyheath. As one Woolwich non-executive director remarked, "He's been a very silly boy."

It's all very puzzling. Why on earth would a man paid pounds 300,000 a year, a man who stood every chance of making many times more than that in share options and bonuses in the forthcoming flotation of the Woolwich, risk it all for allegedly accepting a few freebies and a bit of home help from staff?

True, the sums weren't always small. A pounds 28,000 Range Rover was inexplicably paid for by the society when it had already provided Mr Robinson with a Jaguar. But beside the riches Mr Robinson could expect to make as boss of a future Footsie company, they didn't amount to a row of beans.

And his departure has since become more puzzling still. Not content with attacking Mr Robinson's ethics, the society is now putting the boot into his management style. According to former colleagues, he was brash, blustering, indecisive, inconsistent, bad-tempered and autocratic - in one instance he called a senior executive back from holiday to deal with a trivial incident.

Yet this was a man who had worked for the society for 32 years and been admired enough to rise to the very top. He was passed as "fit and proper" to run a deposit-taking institution by the Building Societies Commission. He was well regarded by his predecessor, Donald Kirkham, who groomed him as his heir apparent. And he was named as chief executive-elect a full year before the retirement of Mr Kirkham, so certain was the board that he was the right man for the job.

Somehow his sudden descent into incompetent dishonesty - as described by the Woolwich - doesn't ring entirely true: we are asked to believe that in the three months he was chief executive he turned from a paragon to a fiend. Power corrupts, and the absolute power bestowed on heads of institutions as unaccountable as building societies doubtless corrupts absolutely. But in three months?

If Mr Robinson is guilty of all the sins ascribed to him, the big question is how on earth such a wrong'un was promoted to such a responsible post in the first place. The responsibility lies not with the Woolwich's current chairman, Sir Brian Jenkins, who seems to have handled the affair well in the circumstances, but with Alan McLintock, the former accountant who previously chaired Woolwich and anointed Mr Robinson.

Why bids go on and on

ANYONE looking for an explanation for the takeover boom sweeping corporate Britain need look no further than the planned marriage of BT and Cable & Wireless. Philip Healey, editor of Acquisitions Monthly, predicts it will generate pounds 300m in fees for merchant bankers, lawyers and other advisers.

This surely must be an over- estimate. Even at pounds 300 an hour - the going rate for a competent City adviser - that works out at a million man-hours, which is equivalent to an army of 1,000 advisers working full time for five months. Merchant banks like to set their fees as a percentage of deal size. But in this case, BT and C & W will surely have haggled, both because of the sheer enormity of the deal and because it is agreed - and therefore comparatively straightforward. Undoubtedly, however, the BT/C&W marriage - if it makes it to the altar - will be tremendously rewarding for the City, topping off a bumper year for mergers and acquisitions.

Britain's love affair with takeover bids is perverse. Every piece of independent research I've ever seen suggests that takeovers do not usually work. Last week, Andy Dickerson of the University of Kent added to the evidence. After sifting through 1,500 completed deals worth pounds 66bn, he came to the conclusion that acquisitions reduced the rate of return of acquiring firms by 14 per cent.

Why then do companies keep on mounting bids? Pressure from the City is obviously one factor. Large numbers of intelligent, plausible, charming people have a personal interest in ensuring that the deals keep coming. An awful lot of country houses, private educations and luxury cars depend on it.

Moreover, the merchant banks are increasingly part of much larger integrated investment banks. Their colleagues now include fund managers, whose large shareholdings decide the fate of bids, and stockbroking analysts, whose advice is influential. It's in everyone's interest to keep bids coming.

Another factor is management ego. Company size counts for a lot and not just because it is an important determinant of top salaries. Senior managers in big companies have less and less to do with the banal business of making the actual product or service better or cheaper. That is done by the heads of their operating subsidiaries. Instead they feel obliged to think strategically. Nine times out of 10 that means making acquisitions or disposals. And one company's disposal is of course another's acquisition.

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