Regulation

If you are a business leader and you yearn to spearhead reforms to British bureaucracy, you have until the end of next week to apply to be the first chief executive of the UK civil service. So far, recruiting the requisite heavy-hitter is proving a struggle.

In the 1970s you could buy a hippy-ish poster of a bird flying towards a lurid sunset, with the maxim: “If you love something, set it free: if it comes back to you, it’s yours; if it doesn’t, it was never meant to be.” I assumed the slogan had expired along with a taste for joss sticks and tie-dye T-shirts. I am amazed to find it has instead become a formal human resources policy.

John Gapper

The global system for taxing multinational companies is broken, but no country wants to alter it too radically for fear of making it worse. That was my impression after hearing international tax experts gathered in Oxford this week to discuss reform.

Reform of corporate taxation has been thrust onto the political agenda in Europe and by controversy over the tax policies of companies such as Google and Starbucks. The ease with which they can shift intellectual property and royalty payments to low tax regimes has outraged politicians on both sides of the Atlantic.

The attempt by Pfizer to turn itself into a UK company for tax purposes by acquiring AstraZeneca has also drawn attention to the use of “tax inversion” by US companies. They want to use the cash piles held overseas to make acquisitions that allow them to change corporate nationality and reduce their taxes.

But while most countries agree that the system of global taxation in place since the 1920s is flawed, there was no consensus at the conference held by the Oxford University Centre for Business Taxation on how to fix it. Instead, most prefer to play defence. Read more

Presumably, although he denies it, Brady Dougan considered resigning as chief executive of Credit Suisse this week when it became the first global financial institution since Crédit Lyonnais in 2003 to plead guilty to criminal felony in the US. In any case, he stayed.

Perhaps the European Court of Justice wants to equal the US Supreme Court in a display of poor judgment. That might explain why it ruled this week that a 19-year-old directive means Google must remove some search results that people do not like.

Andrew Hill

Apparently size matters in assessing business culture. The latest Populus opinion poll for the FT says 61 per cent of British voters want the party that wins the next election to be tougher on “big business”.

This result raises all sorts of questions – and not only for the political parties, which appear to be drawing up the battle-lines over how to treat business. With British elections one year away, it underlines, for example, that companies need to recalibrate their strategies to deal with political risk on the home front. It also makes me wonder how British people, let alone their elected representatives, define “big business”. Read more

Denigrate, imitate, eliminate are the three steps that incumbents typically take to see off challengers using an unconventional business model. But there is a fourth – regulate.

Tom Perkins, the Silicon Valley venture capitalist, made a terrible mistake by comparing criticism of rich Americans – the “1 per cent” – to the Kristallnacht attack on Jews in Germany in 1938. Mr Perkins, co-founder of Kleiner Perkins Caufield Byers, has since apologised.

Andrew Hill

“Fashionable management school theory appears to have lent undeserved credibility to some chaotic systems.”

This line leapt out from the 571-page UK parliamentary review of banking published on Wednesday. It’s in the conclusion to the passage criticising the way in which banks applied the “three lines of defence” risk control framework – line managers, risk controllers and compliance staff, and internal audit. Read more

Andrew Hill

If I were Charlotte Hogg, newly appointed as the Bank of England’s first chief operating officer, I would be a little worried.

It’s not that the UK’s central bank doesn’t need an extra pair of operational hands at the top. The possibility that future governors would be overloaded was one of my principal concerns about the BoE takeover of a large chunk of the now-defunct Financial Services Authority, so Mark Carney, governor-designate, has made the right move.

But chief operating officers are, as I’ve written before, eminently dispensable and their roles are usually difficult to define. Read more

Andrew Hill

You’re about to hear a lot more about “good banks” and “bad banks”. The report from the parliamentary banking standards commission, due on Friday, and Stephen Hester’s departure from Royal Bank of Scotland will reignite questions such as whether RBS should be split into “good” and “bad” operations (Mr Hester opposed this).

Running in parallel is a philosophical debate about how you ensure banks are “good” – in the sense of having a strong, positive purpose.

But there is also the question of whether banks that do good are always good banks. Read more

Andrew Hill

The digerati are having fun with the Securities and Exchange Commission’s ruling that US companies can use social media to distribute market-sensitive information such as earnings reports. “Facebook Flap Forces SEC Into 21st Century,” says Forbes.

Not so fast. The US regulator’s decision to drop its inquiry into Reed Hastings, Netflix’s chief executive, who boasted about new viewing figures on his personal Facebook page, is only an incremental advance into the new millennium. It makes sense for the SEC to acknowledge the growing use of social media (I’m guessing more people saw Mr Hastings’ Facebook post than have viewed any regulatory announcement in corporate history), but I don’t think the decision will prompt fearful CEOs to tweet their earnings much more than they do already – and, even if it does, it won’t make much difference to investors. Read more

It has been a frustrating week for well-intentioned and interventionist political leaders. Michael Bloomberg and David Cameron have been roundly defeated in their efforts to prod citizens into health.

Andrew Hill

Microsoft has been fined by the European Commission. Getty Images

Jaron Lanier is a “partner architect” at Microsoft but he doesn’t speak for the software company. As the scientist, composer and author explained to an audience at The Economist’s Technology Frontiers conference on Tuesday, what he says “probably horrifies any number of individuals within the company”.

Even so, in retrospect, it his hard not to read some of his remarks differently, in the light of the European Commission’s €561m fine for Microsoft, confirmed on Wednesday, for breaching a high-profile competition agreement with the European Union. Read more

Andrew Hill

There are plenty of interesting ironies raised by the news that investment banks are charging asset managers up to $20,000 an hour for access to chief executives, often unbeknown to the executives themselves.

One is that chief executives themselves are no strangers to “cash for access”. It’s a perennial political “scandal” that big corporate donors to political parties get to rub shoulders with the prime minister or his cabinet at private parties and dinners. The last time such a hoo-ha erupted, in 2012, the FT wrote that prominent City figures were “bemused at the outrage” surrounding the affair, describing it as “a healthy part of the democratic process”. One said: Read more