Monthly Archives: February 2012

Andrew Hill

David Willetts, Britain’s universities minister, has a bee in his two-brained bonnet about flawed incentives for British business academics.

Prestige in business schools comes from doing research and being published in peer-reviewed journals, he told an audience of managers, academics and members of parliament in London on Tuesday, launching a discussion of whether poor management is holding back growth. It’s a theme he’s touched on before in relation to wider scientific and academic research. Mr Willetts says that as the lead journals are US-based, they tend to be interested in sophisticated analysis of historical, mainly American, industry data:

We’re rewarding British academics and British business schools for analysing American industries… It’s not at all clear to me that this the right set of incentives.

This has an unwelcome tinge of nationalism but it is hard to argue with the underlying point. Read more

Andrew Hill

When Texas congressman and US Republican presidential candidate Ron Paul accused his rival Rick Santorum of being “fake” during last week’s televised debate, Mr Santorum pinched himself and said: “I’m real, Ron, I’m real,
I’m real.”

Andrew Hill

What does the march of women into senior executive positions look like? Something like this, according to a new Thomson Reuters report:

Progress to the C-suite: the steeper, the better

Each triangle represents one of the 1,965 companies in the Asset4 global database of environmental, social and governance information. If the proportion of female managers out of total management were the same as the proportion in the workforce, the lines would cut the graph in two, bottom-left to top-right. But the lines remain shallow, despite a slight improvement between 2005 and 2010.

As I’ve written recently, an obsession with boardroom quotas is a distraction. Groups that want to fish in a deeper talent pool – and improve innovation and corporate performance – should be more worried about the shallow gradient of these executive lines. Read more

John Gapper

It sounds technical but I find the most intriguing aspect of the newly redesigned Bloomberg financial information service is the search engine.

I went to a presentation in New York today on Bloomberg Next, a simplified and restructured version of its $20,000 a year service, to hear how it intends the $100m initiative to keep adding subscriptions in a tough market. Read more

Andrew Hill

I wish David Cameron and his government would make their minds up about what they think of business. One week they endorse the stripping of titles from disgraced banking barons and allow the flames of the campaign against bonuses to spread; the next, the UK prime minister is out warning about “dangerous rhetoric” that implies “wealth creation is somehow anti-social”.

It is a bit like the club chairman showing football fans a pre-match video of heinous fouls committed by the visiting team’s players and then complaining when the same fans become abusive during the match.

Mr Cameron — and his opposite number Ed Miliband, who made a cack-handed attempt to start separating business into “good” and “bad” sectors in a speech last year — must start to realise that there is nothing to be gained by such confused debate, and much to lose. Read more

There isn’t much moral high ground in Las Vegas and Steve Wynn failed to take it this week.

Mr Wynn, who pioneered Vegas’s rise from tawdriness to a luxury family resort – and then extended his empire to Macau – spent the weekend not only accusing his former business partner of bribing foreign officials but seizing his $2.5bn stake in Wynn Resorts at a substantial discount. By the time Kazuo Okada woke up on Sunday, his equity had vanished.

John Gapper

Lloyds Banking Group’s decision retrospectively to reduce the 2010 bonuses of senior executives involved in mis-selling loan insurance is a sign of the increased risks that bankers are starting to face personally.

The move strikes me as appropriate: it is an effective sanction against bankers over-selling high-margin products that will earn them big bonuses but turn out to be bad for customers. But the implications for the individuals involved, and for the industry as a whole, are serious.

It has the effect of turning “bonuses” –  a form of profit-sharing that most investment bankers have come to rely on for most of their income – into actual bonuses. In other words, provisional payments on which no individual can depend.

The fact that bonuses may be clawed back will make it much more risky to spend them on property or other things. Logically, they now ought to be kept in savings or shares for at least three years while there is a possibility they could be taken back. Read more

Andrew Hill

Fujitsu’s plan to enter the European smartphone and tablet market has a 1980s ring to it. By the early part of that decade, Japanese companies had already grabbed large shares of the markets for televisions, hi-fi units, calculators, electronic toys and digital watches. These days, Europeans are more used to hearing about new Chinese, Taiwanese and South Korean entrants.

But in phones, Japanese manufacturers have largely concentrated on domestic consumers, using country-specific technology and features. It will be interesting to see how many of these features travel, and how many have to be tailored to local tastes, as Japanese phone makers break out of their national silo. (There have been reports that Panasonic is also planning to launch a mobile phone for the European market* and Sony Ericsson – already present – is, as of last week, wholly owned by Sony.) Read more