T im Martin at JD Wetherspoon writes some entertaining chairman’s rants and, if you skip the sermons on Brexit, he is reliably thought-provoking. The UK governance code’s recommendation that non-executives should serve no more than nine years sounds roughly correct, whatever Martin thinks. Boardrooms require fresh air to encourage free thinking. And the expectation that “a chief executive should not go on to be chairman of the same company” exists for sound reasons.
There are dangers in investing too much power in one individual, as the US corporate scene demonstrates often . First, it must be irritating to be criticised by Columbia Threadneedle, the fund manager that controls 16% of Wetherspoon, over the nine-year rule. Columbia’s corporate parent, the US group Ameriprise, he says, contains a duo that would be regarded as past their sell-by date by UK standards. It’s fair to point a finger in the other direction.
Martin’s second point – the critical one – is that “one-size-fits-all does not work in the real world”. Part of the reason may be what Martin calls the company’s DNA. So, yes, trying to impose conventional structures on an unusual company is not necessarily wise. Martin’s musings may be prompted by his worry about what will happen to Wetherspoon after his retirement.
One can see why he wouldn’t want the boardroom to be invaded by outside box-tickers, as he would see it. He could try appointing a couple of staff to sustain the Spoons DNA. There is nothing in the code to stop him. The company won an injunction on Wednesday preventing immediate industrial action by successfully arguing there were “irregularities” in a ballot that requires trade union members to vote in private at home rather than at work.
The risk for Labour was that a strike could have become politicised, allowing the Tories to make mischievous claims about a return to the 1970s. Voters might have sided with the postal workers, but Jeremy Corbyn and John McDonnell would surely prefer to talk about something else in late November. The threatened pre-Christmas timing was meant to maximise leverage in a dispute over pay and employment conditions. In the last episode, in 2017 , the CWU was told its proposed industrial action was unlawful because the mediation process had not been exhausted.
One might not like the trade union act, but a 2-0 defeat, assuming Wednesday’s judgment sticks, is not a good look for the CWU’s lawyers. The Rotterdam rumpus may have been inspired by Paul Polman, the chief executive at the time, but the chairman’s job is to stop these showdowns before they become embarrassing. Shareholders in the UK revolted, predictably, and Unilever was forced into a U-turn, with only a large legal bill to show. As it is, Dekkers is leaving the chairman’s seat after only three years but is easing into a regular non-executive berth at Unilever.
He needs to devote more time to his investment and advisory firm.
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