Alastair Ross Goobey: Fund manager who was instrumental in improving the culture of corporate governance in the City
Wednesday 06 February 2008
Alastair Ross Goobey was one of the most talented and best known fund managers of his generation. As chief executive of Hermes Pensions Management, one of the largest pension funds in Britain, between 1993 and 2001, he played a leading role in developing institutional shareholder activism. He advocated broadening the base of investments held by traditionally conservative pension funds. He was also instrumental in improving the culture of corporate governance in the City.
Ross Goobey grew up near Bristol, and was educated at Marlborough College and Trinity College, Cambridge, where he read Economics. His polymathy had early roots in his facility for both the sciences and the arts at school, further developed, along with music and acting, at university.
Alastair's father, George, had been an almost legendary figure in the City whose reputation was built on his advocacy of equities for the pension fund industry. This did not deter Alastair from following a similar career path, initially with Kleinwort Benson, Hume Holdings and then the Courtauld Pension Fund and Geoffrey Morley. He came to prominence as chief investment strategist at James Capel, both as a first-rate and entertaining speaker in the otherwise often dull world of fund management conferences and also with his lively and direct weekly column, "From Your Side of the Desk".
Alastair Ross Goobey was often at his most creative in the area where applied economics and finance met politics and he retained a lifelong interest in the policy end of political life. A free-market Conservative, in 1979 he stood unsuccessfully for Parliament in a safe Labour seat, Leicester West. As a result, he came to know Nigel Lawson and when in 1986 Lawson, as Chancellor of the Exchequer, offered him the job of special adviser, he took it without hesitation. He was recalled to the Treasury by Norman Lamont in 1991 for a year in the run-up to the 1992 election. Both tours of Whitehall deepened his interest in public policy, as well as making him particularly suitable for several senior appointments, including to the Goode Committee on Pensions Law, the Middleton Committee on film industry finance and the chairmanship of the Private Finance Initiative Panel.
However, it was as chief executive from 1993 of PosTel, later Hermes, that Ross Goobey made his biggest mark. Now in charge of pension funds worth £50bn plus, and with sizeable shareholdings in a large proportion of the quoted sector, he had a platform for implementing many of the ideas about which he had been thinking for a long time. These included the need for institutional shareholders to act as forces for the improvement of corporate governance and to make boardroom remuneration more directly linked to success.
More than anyone he was responsible for bringing to an end the comfort zone of three-year rolling contracts for CEOs. By creating Hermes Focus Asset Management he paved the way for institutional funds to add shareholder value more directly and in an entrepreneurial way. He led pension fund managers deeper into property, a market about which he had thought carefully since his Courtauld days, and written about in Bricks and Mortals (1992), an excellent account of the 1980s property boom and bust. He was a regular columnist in the Estates Gazette. In 1995 he was elected president of the Investment Property Forum.
Ross Goobey was much in demand as a non-executive director and adviser. He played a full role in the development of the investment strategy of the world's largest medical research charity, the Wellcome Trust, as well as serving as a member of the Council of Lloyds, as Chairman of Invista, as Senior Independent Director of Gcap Media and on the European Advisory Board of Morgan Stanley.
He was also a prime mover in the creation of the International Corporate Governance Network, encouraging ethical boardroom behaviour. He was happy to defend responsible profit maximising in the interests of shareholders from woolly-minded advocates of corporate social responsibility. He was equally happy distinguishing between legitimate entrepreneurial "animal spirits" and pernicious greed. His work to improve corporate governance will probably be his most enduring legacy, reflected among other things in many of the provisions of the Combined Code on Corporate Governance.
Ross Goobey had plenty of energy left to expend in his spare time. He wrote another book, The Money Moguls (1987), and also an unpublished historical novel set against the backdrop of France's equivalent of the South Sea Bubble – John Law's great Mississippi scandal. He was also active in charitable and voluntary work, as a Trustee of CancerBACUP, as a Governor of the Royal Academy of Music, on the investment committees of the National Gallery, with fund-raising for the National Opera studio and as an adviser to the Royal Opera House pension fund.
Despite outward appearances (for many years he wore a three-piece suit and watch-chain), he was no establishment figure, but he was none the less a City man of the post-Big Bang type. A meritocrat, he always spoke his mind. When the equity markets halved in 2003, he went on Radio 4's Today programme to tell fund managers that the markets were mispriced. He didn't mince his words: "Fill your boots," he said of equities. He had picked the bottom.
Although he was well known by many of the movers and shakers in the City and politics, he never used personal contacts for professional advantage. He was most at ease on family holidays at his house in France, with a small circle of close friends, playing the piano and the clarinet. His wife, Sarah, whom he had met in a theatrical society while a student, was at the centre of his social life. She, and his daughter and son, always came first.
He was active in club cricket well into his forties and was an avid follower of Test cricket. He was a man of no side, extremely straight in his dealings with friends and professional acquaintances. It was once said of him that he was "so straight he doesn't even jaywalk". His sense of humour was deep, but wry and restrained, and in not wearing his emotions on his sleeve, he was certainly of the pre-Diana age.
A number of people have remarked that Ross Goobey's appointment as CBE was insufficient recognition of his contribution to British financial and public life. He was a kindly and extremely clever man. The courage with which he faced his cancer confirmed his many other characteristics, of which the most important was complete integrity.
Alastair Ross Goobey, fund manager: born London 6 December 1945; staff, Kleinwort Benson 1968-72; staff, Hume Holdings 1972-77; investment manager, Pension Fund, Courtaulds Ltd 1977-81; director, Geoffrey Morley & Partners Ltd 1981-85; special adviser to the Chancellor of the Exchequer, HM Treasury 1986-87, 1991-92; chief investment strategist, James Capel & Co 1987-93; chief executive, PosTel (later Hermes Pensions Management) 1993-2001, chairman, Hermes Focus Asset Management 2002-08; chairman, Private Finance Panel 1996-97; CBE 2000; chairman, International Corporate Governance Network 2002-05; senior adviser, Morgan Stanley 2002-08; married 1969 Sarah Stille (one son, one daughter); died London 2 February 2008.
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