CITY AND SUBURBAN
Looking for a loser in the French Grand Prix we could all do with a breather
CHRISTOPHER FILDES
My selfless researches in the Longchamps area over Easter show how far the terms of trade have moved against us. At 73/4 French francs to the pound, the pastis is seriously over-valued and I recom- mend a switch into martinis. Our hopes must rest with the elections and with Jacques Chirac, front-runner in the Grand Prix de l'Elysee, who has just picked a cracking quarrel with the Banque de France. When an incoming government takes on its central bank, whichever of them wins, there is one sure-fire loser: the currency. Sterling and Harold Wilson proved that, thirty years ago. The row with M. Chirac was set off last week when Jean- Claude Trichet, the Banque de France's governor, called for wage restraint. All cen- tral bankers like to call for wage restraint, because wages are quite outside the scope of their responsibility, so if everything goes wrong, it won't be their fault. Blasting him for intellectual conformism, M. Chirac told him that he was not there to tell the gov- ernment which economic policy to follow. Nor were his views to be mistaken for the word of God. So much for the indepen- dence ceremoniously conferred upon the Banque de France two years ago. It will be free to do as President Chirac says. That would devalue its authority and could do as much for its currency. This has set Le Figaro speculating that M. Chirac would abandon the rigours of the franc fort policy and give the French a breather. If the franc and the mark came apart, it would, as Le Figaro says, postpone the European single currency to the Greek calends — for years, that is, or for ever. It would give us all a breather. If the polls go on running M. Chirac's way, and silll more if he wins the Poll that counts, the markets will test the Banque de France's resolution — or his. expect storms, and hope for better terms.
Harold v. Rowley
I DRAW M. Chirac's attention to the scene in Downing Street recorded by Nicholas Davenport, my sainted predeces- sor. He found Harold Wilson as a new Prime Minister with his feet, in new suede shoes, on the Cabinet table. Between puffs at his pipe he was grumbling about 'Row- ley' Cromer, Governor of the Bank of Eng- land: 'You know, Nicholas, I had to take control of the little affair with the Gover- nor. We had a proper confrontation in this room. I .heard what he had to say — you know, the stuff about freezing wages and cutting government expenditures. So I said: "Mr Governor, I would like to ask to ask you one question. Who is governing Britain? The Governor of the Bank or the Prime Minister?" [Puff! Puff!] He didn't like it. [Puff! Puff!] No banker likes being deflated. They like to impose deflation on oth- ers.' Both were committed defenders of ster- ling, Cromer ex officio and Wilson as a matter of political decision. Sterling, of course, lost.
Going round in circles
SOME THINGS in France do not change. The electors can vote for the &argue of their choice. Jacques Chirac, Edouard Bal- ladur and Lionel Jospin have all come up the inside track from the Ecole Nationale d'Administration. (So did Jean-Yves Haberer, who was the presiding genius of Credit Lyonnnais.) M. Chirac puts himself forward as the least enarquist candidate. We have had nothing quite like it since lain Macleod, taking time out of government to edit The Spectator, debunked the 'Magic Circle' of Etonians who had wafted Lord Home (K.T., 0.E.) into Downing Street.
Arlen asks the owners
GREVILLE HOWARD is a holder of my Fruit and Nut Award for Cadburial incor- rectness. Arlen, the company he chairs, took no action to comply with Sir Adrian Cadbury's code of conduct — because Arlen thinks it naive to suppose that a set of rules can be a substitute for proper behaviour by directors. It is up to the com- pany's owners to keep their stewards in order. Now Arlen's board says: 'We are aware of the laudable aim of the code, to control abuse by directors. We therefore propose to introduce a more realistic con- trol than the setting up of committees.' They want to amend Arlen's articles of association, so that any long-term service contract will require advance approval by shareholders in general meeting. This will apply to all directors' contracts for six months or more. The effect is to write into Arlen's articles the clause that I want to write into company law, as the ultimate deterrent to directors who write lavish con- tracts for each other.
A Fruit and Nut bar
MY CLAUSE would make boards seek approval for directors' contracts from the shareholders. They, if they chose, would have the power to tear these contracts up. That would be more of a sanction than all Sir Adrian's remuneration committees now busily engaged in taking in each others' washing. It would also pass the buck back to the company's owners, where it belongs. I recommend it to Sir Richard Greenbury, who is inquiring into boardroom pay, and must wish he had never raised his head above his desk at Marks & Spencer. He is said to favour company reports in yet more numbing detail, with statements from the remuneration committees, who would have to explain how they reached their decisions to give their executive colleagues a leg-up. (They consulted consultants? Ooh, you guessed.) Instead, Sir Richard should adopt the Arlen clause, declaring it to be Green- buarially correct. As for Mr Howard, he receives a jumbo bar to his Award.
Hunting the Chase
THE BEASTS have a Chase in view. Bid- ders are hot on the trail and the Chase Manhattan Bank, once so rich and stately, must learn to run faster. Its chairman promises 'material' cuts in costs, as chair- men do when they look like becoming economies. This would not have been the style of David Rockefeller, chairman in the Chase's palmy days, who was happiest when bowling round the world and setting it to rights. When Tito conned the International Monetary Fund into agreeing to meet in Dubrovnik (he switched it to Belgrade) I learned that the venue had won David Rockefeller's blessing: 'Dubrovnik? Oh, good. We can all go on our yachts.'
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