Should we care about the resignation of Hector Sants as chief executive of the UK’s Financial Services Authority?

No disrespect to Mr Sants, but the City watchdog has been a lame duck regulator since the Tories made it clear they would break up the FSA if they win the UK general election in May - which they are likely to. Mr Sants will work his notice until the summer. He has made it clear, however, that he opposes the Tory plans to dismember his organisation, with the supervisory arm being folded into the Bank of England and a new agency taking over consumer protection. Both he and his chairman, Lord Turner, have apparently turned down running the former bit in a new role as a third deputy governor of the Bank. He is an experienced and qualified banker who will no doubt find an interesting new job. So this is not a personal tragedy. Continue reading "Much ado about nothing at the FSA"

Hector Sants has resigned as head of the UK’s Financial Services Authority. Brooke Masters, the FT’s chief regulation correspondent, talks about the future of regulation in the UK.

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Sants quits as FSA chief executive FT

In the old days, it was called PR. Now it is the narrative. A big theme in business culture in recent years has been the rise of corporate narrative - the push by companies to shape the story of their business and culture for internal and external audiences. It is a corporate recognition of the old Gabriel Garcia Márquez line that: “What matters in life is not what happens to you but what you remember and how you remember it.” Continue reading "The Goldman Sachs narrative"

Toyota Motor, presumably reading my colleague Dan Bogler’s posting, has apologised for those pesky accelerator brakes. And almost immediately recalled a slew more cars in its home market of Japan, begging the question: how much does an apology help? If you’ve spent the weekend going slo-mo back to your dealer and missed Jack’s first soccer match/Susie’s riding lesson or watched your shares lose nearly a quarter of their value, it may only go so far. Continue reading "GM, Ford: Reasons to be grateful to Toyota"

The world’s top 10 pharmaceutical companies spend around $50bn a year on research & development…but have very little to show for it.

The cost of bringing a new drug from the laboratory to market has risen to around $1bn and, in an influential study released last year, McKinsey estimated that the industry’s return on R&D over the past decade has averaged just 7 per cent, below its cost of capital. It is startling that companies boasting operating margins of 30 per cent or more are actually destroying value in their core activity. No wonder the sector has been de-rated so substantially over the past 10 years. Continue reading "Glaxo shows the way in making research pay"

There has been a lot of hand-wringing in the UK about the future of Cadbury under Kraft Foods, which is currently raising debt to fund its $19bn acquisition of the chocolate maker.

It is understandable that employees, in particular, are uncertain about their jobs; it is also clear that Cadbury is a name that resonates publicly in a way that glass maker Pilkington or even BAA, the airports operator, both of whom were taken over by foreign rivals, did not. But there are some simple truths that should not be drowned in all the emotion.

Despite its Quaker origins, Cadbury has long been a commercial enterprise, run for profit. It is the current management, after all, that decided to close an iconic plant in Bristol with the loss of 400 jobs and Kraft that is promising to review the decision and “invest in British manufacturing jobs.

Second, Cadbury is already much more international and much less British than meets the eye. Only a fifth of sales come from the UK and Ireland. Its chief executive is an American and its top management committee is made up of continental Europeans, Indians and Americans alongside Brits.

Nor should you jump to the conclusion that Kraft, the home of cheap, processed cheese, has nothing to contribute to how Cadbury is run - or will necessarily pull investment out of the UK.

When Spain’s Santander bought Abbey a few years ago, there was widespread scepticism about what the Spanish could teach the British about banking. Yet the purchase has been an undoubted success. Santander’s IT infrastructure, processes and common sense have indeed proved superior to those it inherited at Abbey and the Spanish bank has gone on to roll up other UK financial brands, creating jobs along the way. Why shouldn’t Kraft be able to do the same?

Related links:

Latest news on Kraft-Cadbury FT
50 reasons to fight Kraft Dan Roberts, The Guardian
Cadbury: banks are the real winners Robert Peston, BBC
From corner shop to Cadbury, the global brand FT interactive timeline