A fat cat writes: Away with this girthist

and speciesist bias in boardrooms

CHRISTOPI-WP FiLDES

t is a sad reflection on modern busi ness life that the debate on corporate

governance and boardroom pay

should be conducted in terms of

mindless prejudice (writes my feline correspondent, Mrs Jellicle). Every director who is allowed to curl up on a millionpound cushion attracts a term of abuse which I shall not repeat. Suffice it to say that this must be deeply offensive to all cats, and particularly to those who could be described as exhibiting the fuller figure. It typifies the girthist and, indeed, speciesist attitudes which have held back cats' careers for so long. The Companies Acts make no distinction between classes or species of directors, but legal theory is one thing and practice another, and we are all too accustomed to banging our heads on the glass cat-flap or getting stuck in it. We can only wonder why those on the other side of the flap require so many inducements to see them through the day: salaries, bonuses, share options, long-term incentive schemes, pension plans, arrangements for having their fur stroked by counsellors — all devised by consultants who make a good living out of complexity, and ratified by committees of non-executive directors who, in their weekday jobs, are on the receiving end of arrangements just like these. After ll, they are only human. We cats, by con trast, might have been made for the nonexecutive life. We expect to be fed on smoked salmon, we nap after lunch, but we have an acute sense of smell, and sharp claws, which we keep in reserve. Independence helps, too. Ask yourself why there were no cats on the board of Marconi, or Enron. It is time that a Catbury Code was enforced by Patricia Mewitt.

Strictly Personal Strictly Personal

Now here is a policy statement to set Mrs Jellicle purring: 'No directors are eligible for pension benefits, share options, longterm incentive schemes or other benefits.' The directors of Personal Assets Trust somehow get through the day without any of these come-ons. The investment director is the only one paid in six figures, and his opposite number at Aberdeen Asset Management was paid ten times as much before Aberdeen's financial engineering came apart. So limited are these directors' incentives that their trust has knocked spots off the FTSE All-Share Index, its benchmark, outperforming it by 22 per cent over the year to 30 April and, over the last three years, by 48 per cent. One form of motivation, unfamiliar in boardrooms nowadays, they do have: 'The directors, with their families, own 9 per cent of the share capital and run Personal Assets for people like themselves.'

Tick no boxes

Directors who think like owners have less need of code-books to keep them in order. Personal Assets' approach is robust: 'The board does not think it appropriate to have separate audit, remuneration or nomination committees, as recommended by the Code.' Their work is done by the board. Nor does its chairman, Robert Smith, think much of the code-writers' latest refinements, as set out in Derek Higgs's report: 'Among its remarkable conclusions was one that suggested that a board would be stronger if it were constantly changing and its members hardly knew each other. Another proposed the appointment of a senior non-executive director as a rival to the chairman.' Personal Assets will pay no attention, and shareholders who are hooked on corporate correctness and make up their minds by ticking boxes will be disappointed, and ponder which way to vote. Real shareholders will dry their eyes.

Testing times Testing times

Monday brings the results of the Famous Five tests for the pound and the euro, so of course they have been leaked and counter-leaked: four fails, we are told — or, as the euro's well-wishers put it, two

es fails and two near miss — and one pass. This is the fourth test: the effect on the City. No doubt it could cope, inside the euro or out. Indeed, since the euro was

launched, the City has coped in good style, dealing in the new currency just as it dealt in the dollar. No more has been heard from the prophets who warned us that if we were not in the eurozone from the beginning, we would lose all our business to Paris and Frankfurt, grass would grow in Cornhill and Canary Wharf would moult. I agree with David Laseelles that the threat to the City goes deeper: 'There lurks behind the euro a potentially hostile culture: one that is fundamentally suspicious of markets, that prefers to keep people like City traders and corporate financiers under control, and that views the Anglo-Saxon model as a potential threat.' Testing, testing.

Hams and eggs Hams and eggs

It is dispiriting to think that in two years' time it will be our turn to host the World Economic Summit. Perhaps, at Evian, there was something in the water to set all the major players hamming it up to their national galleries, while the anarchists threw eggs. About economics, of course, the Evian summit had nothing of substance to say. The first of them, back in the 1970s, was an informal get-together over drinks in the White House library, to talk about currency markets, which were then, as they are now, in turmoil. We could use a meeting like that today but we are not going to get it. Where should we, when we are the hosts, accommodate all these statesmen and anarchists? In the Bank of England? On Rockall? Or should we announce that such grand events can only take place once a century, with ad hoc meetings, over drinks, if there is anything to say?

File and forget File and forget

Siegmund Warburg was the dominant City banker of his day and perhaps of his century. David Kynaston, historian of the City, ranks him with Nathan Meyer Rothschild — but on Monday, the new owners of the bank he founded will drop his name down the oubliette. UBS Warburg (the initials used to stand for Union Bank of Switzerland but no longer stand for anything) will become UBS Investment Bank. A sanctimonious letter to clients explains that putting them first 'will he the cornerstone of our re-branding', so Sir Siegmund will be laid to rest underneath it, unless, of course, he is revolving.