Sayonara, Pilks — we’re short of owners with their hearts in the business
Asprig of the Pilkington family was saying goodbye to his hosts. ‘I’ve an early start,’ he explained. ‘I’ve got to be at the bloody glassworks in the morning.’ When he arrived, he found that the chairman, Sir Harry Pilkington, was there before him and had left a note on his desk: ‘My boy, it seems to me that your heart is not in the business... ’. Family businesses need enough sprigs to allow for such pruning, and this one was a model. Then some stray aunts and cousins wanted a price for their shares. Now Pilkington is just another public company, and in Sir Harry’s place sits Sir Nigel Rudd, a serial non-executive chairman, Pilks is on the receiving end of a bid from Nippon Glass, and Sir Nigel’s board is recommending it. Nippon is half Pilks’ size and seems to have troubles of its own, but the bid is in cash, and so long as the cheque goes through the Sumitomo Bank and out again, Pilks’ shareholders will not worry. They have been calling the shots to Sir Nigel. Few of them will be owners in the sense that the family were. They are investment managers struggling to show superior performance on behalf of life funds, pension funds and, of course, nowadays, hedge funds. For them, the Pilks deal will make this quarter’s performance look good. Another day, another dollar. Their heart was never in Pilkington’s business.
Rank outsiders
Their customers ought to ask, all the same, why the world’s most respected investor thinks differently. Warren Buffett — now close to anointing his successor — has made his own and his followers’ fortunes by buying shares in good companies and hanging on to them. In this way he comes to know and understand them. Both sides benefit. Our own managerial shareholders are frightened of knowing too much and becoming insiders, which would debar them from selling their shares when they wanted to. This does not worry the purveyors of equity capital, whose funds are now big enough to buy most businesses. They find themselves pilloried as traders in companies, buying and selling them for a quick turn, but they may well do better by buying and nursing them. There is nothing to stop them behaving like owners with hearts in the business. That need not make them soft-hearted — they must know when to prune sprigs and cut losses — but it means that their work will be actively done. For all our sakes, British businesses need better owners. They could learn something from their founding families.
All on the record
It’s a fair cop. I have to own up to my criminal record. This is what comes of being a governor (unpaid, of course) of a school. I must fill in my Disclosure Application Form (‘it is important that you use BLACK INK’) and answer 50 questions, and take it along to the school with my passport and a gas bill and a television licence. The school must then answer another eight questions and send the form off to Liverpool, home of the Criminal Records Bureau. At least I am spared question 48, which asks for details of my bank account. For this I can thank the much-missed Lady Blatch, who pointed out that such details, stored on file in Liverpool or (for all I could know) outsourced to Nigeria, would enable a fraudster to clean out my account. So much for the routine reassurance that the innocent would have nothing to fear. I have already been forced to identify myself to my bank, which has known me, for better or worse, for decades. Did Coutts, as I asked at the time, insist on seeing the Queen’s gas bill?
They’re after us
Now along comes Ruth Kelly, who wants to let parents check on their nannies by way of the internet. They can presumably check on me, too, for she will establish a vast central database, and my record is sure to be on it. These powers will come to her under the Safeguarding Vulnerable Groups Bill, for the state can always find plausible reasons for asking more questions. The banks and their customers were meant to tell all and stamp out money-laundering. With identity cards, the bogey will be terrorism. It is easy to imagine data flowing helpfully from pool to pool — the taxman, for instance, would always like to know more — or, for that matter, being tapped and bought and sold from the great central database of databases which, somewhere in Whitehall, must represent an unacknowledged aspiration. If two Winchester schoolboys can hack into the headmaster’s computer and get 50 schools (not mine) exposed for fixing prices, anything can happen. You may think that all this form-filling and gas-bill-producing is making me paranoid. I dare say it is, but they’re after us.
The grandest ruin
The Midland was the biggest bank in the world when it commissioned Lutyens to design a new head office, opposite the Bank of England. It stands empty, and will now be turned (you guessed it) into an hotel, with its lofty boardroom open to conversion as a splendid rooftop bar. Across the City, 10 Trinity Square, built by Edwin Cooper for the Port of London Authority when London was the world’s busiest port, will soon be another hotel, no less grand, and with a third around the corner. So the hollowing out of the Square Mile continues. The Bank must begin to feel lonely in its imperial fortress, built by Herbert Baker, architect of New Delhi: ‘a polite and thoughtful man’, said Kenneth Clark unkindly, ‘with a positive genius for errors of design’. Lutyens was said to have lost the commission by telling the Governor, Montagu Norman, that the Bank in its earlier form — Soane’s masterpiece was just the place for a thé dansant. As an hotel, Baker’s Bank would be more grand than practical: perhaps, as Clemenceau said of New Delhi, the grandest ruin of them all.
Soft answer
The Tessa Jowell Defence — ‘What, me? I just signed where his thumb was’ — can run into complications, as we see. She might like to compare notes with a friend of mine who, breaking the habit of a lifetime, opened a brown envelope and found a fearsome letter from her inspector of taxes. On her behalf, her accountant returned a soft answer: ‘I can quite see why you should have formed such an unfavourable impression of my client. However, I must tell you that, in my opinion, she does not understand money.’ It worked. Always worth trying.
Previous page
