Businessman who broke up Hanson and rescued Marconi
Wednesday 19 September 2007
Derek Charles Bonham, businessman: born Swanbourne, Buckinghamshire 12 July 1943; Finance Director, Hanson plc 1981-92, Chief Executive 1992-97; Chairman, Imperial Tobacco Group plc 1996-2007; Chairman, Energy Group 1997-98; Chairman, Cadbury Schweppes plc 2000-03; Chairman, Marconi 2001-02; Chairman, Songbird Estates 2004-05; twice married; died 3 September 2007.
Derek Bonham was one of Britain's most decisive and effective businessmen. He was an unusual figure, shy, totally averse to any form of personal publicity – all that was known about his private life was that he was twice married – formal, with a strong sense of right and wrong. For a quarter of a century he was one of the small team backing up Lords Hanson and White at the Hanson Group. Indeed, throughout his life, he was happiest in the company of his fellow "Hansonites", though he disapproved of their – and their bosses' – less straightforward behaviour. After he had broken up the Hanson conglomerate he made a major success of two very different business situations, as chairman of Imperial Tobacco and of Marconi.
He was pure businessman: as one colleague put it, "he is not aggressive but he is not sentimental." "He was not an easy man but he would listen to your views," said another friend, "a formal, thoroughly proper person." Socially he seems to have found himself most comfortable at the dinners and other events organised by the City's livery companies – he was on the court of the Feltmakers. But, says a friend, "above all he felt that doing a job well was the most important aspect of his life."
Bonham totally lacked any capability to perform in public, arousing the ridicule of shareholders at an AGM of Marconi when he told one lady protester "Madam, what a lovely hat you are wearing." But he could be very persuasive. Once, when he forgot his passport, he managed to persuade the immigration authorities in both Britain and France to let him travel without it.
After Bedford School Bonham became a chartered accountant before going to work for the Hanson Group in 1971 while still in his twenties. He survived and prospered as one of the small group sufficiently respected by the two founders to be able to argue successfully against some of their more outrageous schemes. After Hanson and White's numerous takeovers, "his job was to dissect the body and discover the hidden treasures", according to a a former colleague.
On Lord Hanson's retirement in 1992 Bonham became chief executive and was described, not surprisingly, as "the man who rose without a trace". Four years later, after Lord White had died, he split the group four ways, originally taking the job of chairman of Hanson's energy interests, in industrial terms far less important than his previous role, a classic example of his unpretentious attitude.
But in 1996 he became chairman of Imperial Tobacco, another component of the Hanson empire. It had been Hanson's last major purchase and had involved the usual Hanson technique, selling off unwanted subsidiaries like Courage beers, and instituting strict controls over cash and investments. Within a decade – helped by an able executive team, for he was always prepared to delegate – he transformed what had been an almost entirely UK-based operation into one of the biggest world-wide tobacco companies.
Indeed, his chairmanship witnessed one of the most significant British corporate success stories of the last 10 years, although it remained unsung because it was based on tobacco. Over the 10 years after it was de-merged from Hanson, sales and profits more than trebled thanks to ruthless efficiency drives, including the closure of a number of British factories. Bonham's attitude to the tobacco industry was simple: "He never made moral judgments," says his long-time friend Lord Bell. "He felt that people should be allowed to live their own lives."
No one knows for sure why Bonham took on the ungrateful task of trying to rescue Marconi, formerly, as Lord Weinstock's GEC, a giant which had been weakened by Weinstock's refusal to build and invest and then destroyed by the profligate incompetence of his successor Lord Simpson. It certainly wasn't for the honour, let alone for the money. It seems to have been a sort of moral impulse, to clear up what he clearly regarded as a disgraceful mess.
Against the odds he succeeded in preventing a total collapse. He had become a non-executive director in early 2001 but in September that year Simpson had to admit that the firm was bleeding cash at a truly alarming rate and had accumulated billions in debts. Bonham immediately took charge. In an eight-hour meeting in the company's boardroom on his first afternoon in the job he summarily dismissed not only Simpson but also Sir Roger Hurn, his predecessor as chairman and a colleague on the board of SmithKline Beecham. Afterwards he claimed that what he really needed was a glass or two of wine, not the muffins which had been his sole nourishment that day.
His anger at the considerable sums due to Simpson and to John Mayo, the former finance director, was the only occasion in his career when his feelings became public. At a Marconi shareholders meeting he said that he greatly regretted "that I did not manage to get a better [severance] deal with Lord Simpson" and regretted that "Mr Mayo pursued his claim for full financial entitlement" on his departure – Mayo was suing for a further £1.6m in addition to his £1m severance pay. In private he was even more brutal: "These people demonstrated that they were crooks," he told a friend.
He was helped not only by his reputation but by his experience in sorting out debts. "Hanson's deal-making background was the perfect training ground for sorting out the mass of debts left by his predecessors," says a friend. In not much more than a year he had managed to reorganise the company's £4bn debt burden and left the firm solvent. But he was happy to leave, saying that "I have responsibilities to other shareholders... I look forward to hanging up my boots."
Of course he didn't. He had already had a number of non-executive positions, notably as a short-lived chairman of Cadbury Schweppes, not a business which he found stimulating, and of Glaxo Wellcome until he was chased off the board by anti-smoking activists. He only retired from his position as the chairman of Songbird Estates, the company that owns Canary Wharf, because of illness. Bonham never received any honour. "He had no self-importance," says Lord Bell, "although people used to assume that he was Sir Derek because of his importance in the business community."
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