Monthly Archives: December 2011

Andrew Hill

Speculation about António Horta-Osório’s condition will not end now that Lloyds Banking Group has announced the “full recovery” of its ailing chief executive and heralded his return to the job on January 9. Sir Win Bischoff, chairman, told journalists on Wednesday that the cause of the CEO’s sudden enforced departure in November was physical – overwork, sleep deprivation and exhaustion – but “certainly not stress”. Each director has met the chief executive separately and judged him fit to return, as have independent medical experts.

Asked how Mr Horta-Osório seemed to him now, Sir Win replied: “Very well, very well, very well. Bushy tailed. Terrific. Big smile.”

In other words, just as he seemed – to me, to other commentators, and probably to Sir Win - when he was appointed last year. For directors, and shareholders – which include UK taxpayers through holding company UKFI – the important thing is to ensure that Mr Horta-Osório does not suffer any relapse. Sir Win said on Wednesday he was confident his CEO was fit, but if it turned out he wasn’t, he intimated that his own job as chairman would be on the line. Read more

Andrew Hill

Harvard Business School has launched its big US competitiveness project. It’s a full-bore research-led effort dedicated to improving “the ability of firms operating in the US to compete successfully in the global economy, while supporting high and rising living standards for Americans”. How will non-American alumni feel about that?

Michael Porter, HBS’s competitiveness expert, is in the vanguard. He talked to me about how the US was starting to lag behind when I interviewed him in September, and he and colleague Jan Rivkin reiterate some of these themes in a video interview for the competitiveness project with Justin Fox of Harvard Business Review. As Porter says:

The US’s vitality and dynamism [are] really very fundamentally important to the global economy.

Fair enough. But the project does underline that HBS, for all its aspirations to attract more international students and faculty, is an American business school, with American preoccupations. There is something a little odd about hearing Nitin Nohria – the first HBS dean born outside the US – declare in another video interview that he “can’t think of a problem that affects everybody in the world, not just in the US, more than this question of US competitiveness”. Really?  Read more

Andrew Hill

Old habits die hard in US corporate governance: Pfizer has just announced it will hand chief executive Ian Read the chairmanship. That re-creates the dual chair-CEO role and goes against the slow US trend towards splitting the two top board jobs.

According to Spencer Stuart, the headhunter, 41 per cent of top US companies now separate the roles (though the chairmanship is too often held by the ex-CEO), compared with 26 per cent in 2001. So, as governance expert Lucy Marcus tweeted on Tuesday, Pfizer’s decision is an “astonishing step backward“. Read more

One word describes the attitude of many corporate chairmen towards Sir Tom McKillop, the man who chaired Royal Bank of Scotland to the edge of oblivion between 2006 and 2009: sympathy.

John Gapper

The difficulties of Amazon’s Kindle Fire tablet reminds me of how peculiar it was to hold a launch event at which no-one was allowed to try the device. With hindsight, I and others there should have taken that as a warning.

At the launch in New York in September, Amazon executives showed off the Fire and other Kindle models while journalists and others were kept at a safe distance. Outsiders were not given a chance to see how the devices performed for themselves. Read more

John Gapper

The most breathtaking aspect of Jon Corzine’s prepared testimony to a Congressional committee on the collapse of MF Global is his claim to know little about clearing and settlement.

Mr Corzine’s defence for the missing funds at the commodities broker that he formerly headed is ignorance – that while he knew quite a lot about trading, he left the back office responsibilities to others.

He thus did not know about the missing funds at MF Global until the Sunday night of the weekend when he was trying to strike a deal to rescue the firm. Read more

Despite the criticism that rating agencies have endured in the past three years – much of it justified – someone at Standard & Poor’s retains a sense of humour.

Andrew Hill

When it comes to companies, the less murk, the better.

In the new edition of London Review of Books, author and journalist John Lanchester points out that three recent corporate “outrages” – the sale of UK lender Northern Rock to Virgin Money, the collapse of MF Global, and the Olympus scandal – share “a crucial similarity”:

An interested outside party, paying the closest of attention, and immersing herself in all the publicly available information, would have had no chance of knowing what was really going on.

 Read more