Category: Management

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.

American Airlines finally plummeted into bankruptcy last week, eight years after workers’ wage concessions seemed to have helped parent AMR plot a route out of disaster. Managers hadn’t wrung enough from the workforce in 2003, some claimed. The staff hadn’t pulled their weight since, said others. Many concurred that the “discipline” of bankruptcy would have been good for American.

The pun proved irresistible. “Mystery Ends, Mistry Begins”, ran the headline in India’s Economic Times on the appointment last week of Cyrus Mistry to succeed Ratan Tata at the head of the eponymous tea-to-steel holding company. If the succession was a mystery, it looked to have a pretty feeble final twist.

Andrew Hill

Michael Woodford has undoubtedly done a service to Japanese capitalism by exposing the accounting scandal at Olympus. But is the former president and chief executive the right man to lead the camera and medical equipment maker out of the mire? I think not.

The British executive is now back in Japan and due to meet the directors who fired him on Friday. Three executives formally resigned as directors on Thursday ahead of the encounter, but I would still love to be a fly on the boardroom wall for it.

Nine hundred people talking animatedly online about brown clinker – a cement ingredient – doesn’t sound much of a vision. But it may be exactly what computer visionaries had in mind when they first envisaged computerised collaboration between workers midway through the last century.

Colourful opportunists are characters from the M&A world’s myth of combat. Here, acquisitions – and not only the hostile ones – follow weeks of hand-to-hand skirmishing, first between bullish chief executives and their more cautious boards, then between the company and its investors, and finally between the merging groups. This tale and its romantic corollary, the myth of true love – clashing armies, or blushing brides – are the stories on which the media thrive.

Andrew Hill

I have two immediate reactions to the shock announcement that António Horta-Osório is temporarily stepping aside as chief executive of Lloyds Banking Group because of stress. One is frivolous, one serious:

1) His predecessor – the eerily impassive Eric Daniels – must have the constitution of an ox, given that he led the big UK bank through the credit crunch, a controversial merger with HBOS and the 2008 government recapitalisation. (Mr Daniels is a smoker, which I suppose may have helped calm his nerves).

2) The rarity with which top executives admit to suffering stress must mean boards are underestimating the occurrence of stress-related illness at the top – with potentially dire consequences.

Whatever the reason for Michael Woodford’s abrupt exit from Olympus (of which more later), everyone can agree that if the board’s chosen chief executive leaves prematurely, something has probably gone wrong.

Business blog

Strategy & managing

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This blog is mainly about business and strategy and how and why people who run companies take the decisions that they do.

Most of the time, John Gapper is in New York and Andrew Hill is in London. We occasionally debate business issues between us, but your comments and criticism are welcome.




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About John and Andrew

John Gapper is an associate editor and the chief business commentator of the FT. He has worked for the FT since 1987, covering labour relations, banking and the media. He is co-author, with Nicholas Denton, of All That Glitters, an account of the collapse of Barings in 1995.

Andrew Hill is an associate editor and the management editor of the FT. He is a former City editor, financial editor, comment and analysis editor, New York bureau chief, foreign news editor and correspondent in Brussels and Milan.

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