CITY AND SUBURBAN
Art any more than a steward? Dost thou think thou canst write thine own cheque?
CHRISTOPHER F I LDES
Mr Peter Thurnham (Conservative, Bolton North East): Will my Rt. Hon. friend consider giving to the shareholders of privatised utilities greater powers to decide the salaries of their directors in advance, rather than reading about them months after the event?
The Prime Minister: My Hon. friend makes an ingenious suggestion, which I shall be happy to consider.
This was the exchange, at question time on Budget day, which made me think that I was getting somewhere. My patient readers are inured to hearing from me that the owners of a business should decide how much to pay their stewards. My one-clause Companies Act would provide that direc- tors' contracts were subject to their share- holders' confirmation, by vote in a general meeting. So (Mr Thurnham and I think) Mr Brown the gasman may be worth his basic £475,000, but it is up to British Gas's shareholders to say so. The Prime Minister is now reported to want something like my one-clause Act, with the Chancellor for it but Michael Heseltine against it. He has been sold the directors' party line, which says that companies would be inhibited from hiring the top management they need. This is self-interested hooey. A board which cannot be confident of justifying itself to its shareholders is probably plan- ning to do the wrong thing. Directors in doubt can always take soundings, and should. Alastair Ross Goobey at Postel Investment Management will be happy to give them a lead. He is already shaming them out of their three-year rolling con- tracts. They were happier when they could settle these things by themselves and for themselves, while observing Sir Adrian Cadbury's code to the letter. British busi- ness will be healthier if the Prime Minister reminds them that they are so many board- room Malvolios — no more than stewards with ideas above their stations.
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