Sterling Performance

Gordon Brown is calling for the UK corporate governance code to force companies to state why they have not promoted more females to top jobs. The answers might be too embarrassingly honest.

The under-representation of women on corporate boards is a continuing cause celebre — and remains a perennial problem because the numbers are stubbornly static at their low level. While three-quarters of FTSE 100 companies have a woman on the board it is usually only one, and a mere 15 of the 100 firms have a female executive, according to Cranfield School of Management. 

Just 12 per cent of FTSE directors are women and the prime minister’s letter to the Financial Reporting Council wants the authors of the government code to make directors tell shareholders what they are doing about it. There’s no talk of Norwegian-style boardroom quotas, but the premier threatens that if having to account for a gender imbalance at board level does not work, he will take “more serious action”.  

Don’t expect any of these male-dominated boards to admit to misogyny. It takes a conspiracy theorist to believe nomination committees universally reject women candidates on principle or prejudice. The reality is that the shortlists provided by headhunters are notably short of females and these firms blame the lack of women willing to put themselves forward for advancement. 

Bending over backwards to find female names to fill-out candidates’ lists usually means bending the selection criteria and overpromotion helps neither the individual nor other would-be women directors, but that is the risk, not only as a result of the PM’s pressure, but also from the Equality Bill, which gives employers the sanction to discriminate positively to promote women. 

Politicians must concede that while there should be no barriers to women wanting to climb the corporate ladder, not all women see that as an objective. And if some choose to curtail their careers prematurely to pursue other options leaving many men remaining in the running, then there will be more males than females in top management.   

If the prime minister’s is successful in inserting a new clause into the corporate governance code, there will still be plenty of opportunity for directors to avoid being honest and provide a meaningless paragraph claiming they have done their best and are always open to appointing suitable candidates.

Brown can try to force companies to promote women but he cannot force women to take the jobs. Equality in business is about opportunity, not about equal numbers in the boardroom.

Did you mark Work Your Proper Hours Day last week? Last Friday was the day that, if the average employee did all their unpaid overtime at the beginning of the year, they actually started to get paid for the work they do.

The initiative launched by the TUC is designed to highlight research from the organisation that found the number of people working over ten hours a week (or extreme) unpaid overtime has increased over six-fold from 14,000 to nearly 900,000 over the last year.

The union calculates over five million employees clocked up over seven hours unpaid work, which is worth £27.4 billion to the UK economy and for those people who work the extreme, ten plus hours, it means effectively, they don’t start getting paid until 26 April.

It’s a chunk of productivity that probably doesn’t figure in many economists calculations, but one that might unexpectedly impact the government’s calculations on how many jobs the public sector should shed, as it’s these workers who are much more apt to work extra hours for no extra pay.

Over a quarter of public sector workers indulge in extreme overtime, compared to one in six private sector staff, according to the TUC’s research.

Teachers and lawyers are the professions most likely to work over ten hours of unpaid overtime and single women are more likely to do so than single men, or couples co-habiting, with or without children.

The figures highlight how much rank-and-file staff are taking on to share the pain of the recession and begs the question how much more will they take?

It also should humble some of the pundits in the private sector who have been baying for massive cuts in the public sector, if those cutbacks mean laying off people who actually provide some of their services for free.

Are you an extreme overtimer? Write in below and tell us.

(Pic: cell 105 cc2.0)

Nick Hine, partner at law firm Thomas Eggar, responds to your employment law questions:

For the last year, one of my team has been off on maternity leave. She was a capable worker who was missed at first, but we had a temporary replacement to fill the breach. My permanent employee is now planning to come back part time three days a week, which means I stand to lose some resources in the team.  Do I have to agree this?

– Name witheld.

An employee on return from maternity leave has a statutory right to request to work flexibly to help look after their child. 

It is not a right though, there is simply a statutory framework in place through which an eligible employee can request to work flexibly.

The request can be made by an adult to care for a child or another adult, but they must have at least 26 weeks continuous service and they should not have made a request to work flexibly in the past year.

The nature of this request could involve hours of work, when they arrive and leave and where they work.

Any eligible employee who wants to change their working conditions in these ways must make their request in writing. 

An employer must meet with the employee within 28 days of receiving the request to discuss the application and within 14 days after the date of that meeting write to the employee to either agree to the new proposed work pattern and set a start date, or to provide grounds for rejecting the application. 

If you reject the application then your employee has a right of appeal and must do so within 14 days of the original application being refused.

You must arrange an appeal meeting within 14 days of receiving that notice and then 14 days after that appeal meeting you must notify the employee of your decision.

There are effectively eight grounds for rejecting a request and these include:

• Burden of additional costs.
• Detrimental effect on ability to meet customer demand.
• Inability to re-organise work amongst existing staff.
• Inability to recruit additional staff.
• Detrimental impact on the employee’s quality of work.
• Detrimental impact on the employee’s performance.
• Insufficiency of work during the periods the employee proposes to work.
• Planned structural changes that would render the employee’s proposed pattern unworkable. 

If you refuse a request then your employee can make a complaint to an Employment Tribunal potentially for sex discrimination and also for constructive unfair dismissal if they resign as a result.

The Employment Tribunal would expect you to have properly considered the request and so if any employer refuses any application they must have a sound reason for doing so. This area is quite complex and I would suggest you take advice if these circumstances arise.

Gentlemen, have you ever stared despairingly at your open wardrobe and felt deeply sapped by its array of boring, uniform, black/grey or navy suits?

Or, ladies, sat in a meeting distracted by worries over the appropriateness of your outfit?

Putting together a wardrobe of elegant, contemporary and individual clothing is a day-to-day challenge, especially in a work environment. 

It’s dull to be always in a boring dark suit, but difficult to be too ‘different’ in case you’re thought of as outrageous or inappropriate.  However, it can be done, you can be different and I hope that I can help you to find your own style and banish some of your dark suits to the second-hand shop.

Getting the basics of good dress is similar to good business — it’s about a sensible budget and getting the team mix right. It makes sense to ask yourself whether your wardrobe is cost effective and you are making the best of every garment hanging there. (more…)

Should companies be part of the state welfare system or left to get on with making goods or supplying services? Not content with collecting taxes from corporations, governments expect them to implement social policies too. The latest imposition on UK employers is to make them give fathers six months’ paternity leave.

Perhaps this is part of the price of progress. No-one envies the Victorian days of six-day weeks without holidays. It is the role of a civilized state to set rules for the improvement of society and those will include conditions at work. But when commerce is the engine of an economy, it is dangerous to overload the motor so much it risks stalling. (more…)

News that the French parliament has voted to regulate businesses in the country, forcing them to fill 40 per cent of board positions with female candidates, will be welcomed by many women around the world.

France has followed in the footsteps of Holland and Spain and the move strengthens the case for similar laws in other countries, including the UK.

At the moment, only 10 per cent of FTSE 100 company board positions are held by women and it may be this same old-boys-club mentality in British boards keeping women out that is in part responsible for the private sector’s current economic woes. (more…)

Sunday Times

Guy Hands: Citigroup trying to break EMI

Guy Hands, the private equity owner of EMI has started a £1.5 billion lawsuit against his adviser Citigroup for allegedly lying about a suiter to the music giant two years ago.

Hands investment vehicle Terra Firma has also alleged the American bank attempted to make EMI bankrupt and so drive a merger with rival Warner Music.

Rival cities target banks over tax hit

Officials from New York, Hong Kong and Switzerland have launched a charm offensive to tempt investment banks from London, following the announcement of a one-off 50 per cent windfall tax from the Treasury last week aimed at city bankers who receive bonuses of over 25,000.

Several large banks have started to draft plans to divert business away from the capital to rival international centres.

Spinvox nears £92m takeover

Christina Domecq, co founder of troubled technology firm Spinvox looks to be out in the cold following a takeover from a US rival.

The troubled technology firm, which fell under a cloud after claims that most of its messages were transcribed in overseas call centres, is close to accepting a $150m (£92m) offer from Nuance Communications, the speech-recognition group because cash has run out and an attempt at a £200m stock floatation has foundered.

Nuance will ask co-founder Daniel Doulton to stay on, but it’s unclear whether Domecq‘s role will survive. She is not likely to get anything from its disposal.

Observer

Revealed: the other two billionaires with a stake in Mitchells & Butlers

Michael Tabor and Derrick Smith - both with backgrounds in betting shops but now powerful investors and big names in the world of horse racing - have separately used nominees and front companies to buy substantial blocks of shares in leisure group Mitchells & Butlers (M&B).

They are members of the “Sandy Lane set” of Barbados billionaires, which includes veteran currency trader Joe Lewis and horse-racing magnates JP McManus and John Magnier.

The holdings will add to the pressure on M&B, and its chairman Simon Laffin, who faces being ejected at the group’s annual meeting next month and comes amid a remarkable boardroom bust-up at the company, which has unfolded over the past two weeks.

The pub group has called in the takeover panel to investigate whether “a number of shareholders” are working together to take control of the business without making a bid, and has fired their four boardroom representatives.

Sunday Telegraph

Fewer women find room at the top

A survey by headhunter Spencer Stuart, the number of companies with one or more woman non-executive directors has fallen to 63per cent compared to 72.6per cent in the same survey last year.

In overall terms the number of women that make up the population of directors in the largest companies fell from 10.5 per cent to just under 10 per cent.

The report said that in every measure of directors in the FTSE 150, excluding investment trusts, women were playing a reduced role compared to the previous year.

Barclays to defer 60 per cent of bonuses

Barclays Bank president Bob Diamond said that bonuses had to be better controlled with more remuneration paid in fixed income. He told the paper the bank had made mistakes in the past, but argued that although banks should not be split between investment and retail it was important that no institution was “too big to fail”.

Independent on Sunday

Cadbury to tell hostile Kraft to beat it, or pay more

Chocolate maker, Cadbury, will tomorrow unveil its formal defence document, rejecting Kraft Food’s £10bn hostile takeover bid.

The US processed food manufacturer’s hostile cash-and-shares offer is currently worth 725p compared with the latest Cadbury share price of 787p. Analysts believe Kraft must pay at least 820p to 850p to win.

Westfield retailers demand another cut in service charges

High profile retailers have told Westfield London, the giant shopping mall, which celebrated its first birthday in October, that service charges need to be reduced again, following a summer cut.

The demands come as retailers head into the most important two weeks of the year.

Figures from the accountants, BDO, last week suggested that sales were holding up against the backdrop of heavy discounting. Total sales on the high street grew by 6.7 per cent during the first week of December.

Enterprise UK, the organisation set up to encourage social entrepreneurship and run by the Department for Business Innovation and Skills has kicked off Global Entrepreneurship Week. The event was launched by a morning of panel discussions at the British Library in London and while there was some sage advice from big business consultants and successful start-up kings, not all of it was in line with current accepted thinking.

Despite Dragon Peter Jones, who represented Enterprise UK, pressing for the need for the UK at large and the UK media in particular to speak up for British entrepreneurs and for entrepreneurship to be part of the national curriculum, other speakers advocated a bit of a more maverick approach.

Here’s some of the more subversive advice to come from the panellists: (more…)

Sunday Times

Alistair Darling acts on bank bonuses: The Chanceller of the Exchequer will be summoning the remuneration committee chairmen of the big four banks to a meeting this week to warn them they must adhere to guidelines established agreed by world leaders at the G20 summit in Pittsburgh last week.

New Look listing: High street retailer New Look’s private equity backers, Apax and Permira, are said to be readying the the 40-year-old clothing chain for an early 2010, £1.7bn float.The equity firms acquired New Look five years ago for £699m and tried unsuccessfully to auction it off for £1.8bn to £2bn a couple of years ago.Other retailers (and New Look itself) have struggled post-flotation — steady earnings expectations and City short-termism seem to abut against the seasonal nature of high-street fashion chains. Still, New Look has bounced in and out of private ownership, but is considered one of private equity’s success stories.

Is Twitter over-valued? Is Twitter’s $1bn valuation a “throwback to the 1990s fantasy era of internet start-ups” or a legitimate valuation of a company that has yet to find
its money-making mojo? Twitter’s own users are sceptical, but investors are keeping the faith.

Judge demand government scrap compulsory retirement age: Mr Justice Blake has said he did not see how 65 can stay the compulsory retirement age during a test case brought by charities Age Concern and Help the Aged, together with the Equality and Human Rights Commission

Sunday Telegraph

Labour pledges cash for industry: The Business Secretary Lord Mandelson is expected bankroll a number of British industries he sees as the bedrock for the future of the economy. Rolls-Royce is in line to receive £45m of funding to build three new aerospace engineering plants and one civil nuclear plant that are expected to create around 800 jobs.

How not to run a board. More trouble at the top for ITV, where the Sunday Telegraph reports that large shareholders are less than enthused with the idea of Sir Crispin Davis stepping into the vacant chairman’s seat. One shareholder is said to have characterised Sir Crispin’s time at his former company, Reed Elsevier, as a “disaster”. Activist shareholders aren’t new, but is this a sign of greater board-level scrutiny? Or is the nominations committee, led by former HBOS chief executive Sir James Crosby missing something in the judgement department. Why is ITV’s board so far away from its shareholders on these senior appointments?

The spirit of Concorde is revived. BA may be charging some for seat selection, but it is also launching a new transatlantic service out of London City Airport called BA001 (famously Concorde’s Heathrow to New York’s JFK route). Apparently, two ’specially configured’ carriers will ferry City high-flyers (sorry) in considerable style to JFK — with one little stop along the way. It seems City Airport doesn’t have the requisite runway length for a packed A318 aircraft, so the service will touch down at Shannon to re-fuel. BA is, it says, turning this into a virtue by using the time to pre-clear passengers through US customs.
Observer

Britain is in danger of becoming an “aircraft carrier” for overseas business owners. Ownership is “not merely emotional,” argues Ruth Sunderland. “it is important for the UK to hold on to strategic industries, to retain skills and patents, and to
protect jobs and pensions.” As if to prove the point, a story in sister paper the Guardian today claims cult car-maker Aston Martin’s in dire straits as its Kuwaiti backers struggle to refinance its debt.

Kraft ready to offer £11bn for Cadbury: City sources say Kraft could bid 800p a share in a hostile bid, which could rise to 850p as the bid battle reaches its climax over the 60-day limit set by the panel for takeovers.This is a substantial increase to the informal offer made by the company for Cadbury of 745p a share three weeks ago.

Where City suits strip off for some very brutal business: City suits find a way to wind down as popularity for Mixed Martial Arts, or cage fighting, has taken hold amongst City professionals. The sport provides an outlet for macho posturing and the competitive spirit so necessary in their day jobs.

Greg Hutchings, the former boss of conglomerate Tomkins, whose name became synonymous with big business excess, could never be accused of being a Luddite. He’s embraced the Web in his bid to be reinstated at Lupus, from which he was bounced in July. He is using his website, www.gregegm.com, as a platform for his campaign to wrest his job back from the turnaround team brought in salvage industrial investment firm Lupus.

Mail on Sunday

Are you paid a pretty penny? Good looks really DO boost wages, researchers say: A study of 4,000 young men and women found that beauty boosted pay cheques more than intelligence. Researcher Jason Fletcher, of Yale University in the U.S found being of above-average looks boosted pay by 5 to 10 per cent.

For a plain person to be paid the same as a very attractive one, they would have to be 40 per cent brighter.

News of the World

What a right M&S: Marks & Spencer has quietly axed its no quibble three-month returns policy. Angry customers have bombarded online message boards to complain. The retailer insisted that the reduced returns policy of 35 days is still the best quarantee on the high street.

Saturday FT

Return Northern Rock to mutual status for the good of consumers, recommends a report from the Centre for Mutual and Employee-owned Business at the University of Oxford.
”We must not allow the UK’s financial services sector to return to the ’business as usual’
model that has proved so costly to the economy and public finances,” one of the report’s author Jonathan Michie says in an FT article.#

Indira Nooyi of PepsiCo takes the top slot in the FT’s top 50 women in world business, with Kraft’s Irene Rosenfeld in fourth. There are no Brits in the top 25.

Research out from the Institute of Leadership & Management (ILM) suggests we don’t trust our CEOs that much. The Index of Leadership Trust, a survey of over 5,600 employees conducted during the summer, found 31 per cent of us have low or no trust in our senior teams.

Unsurprisingly, we place more credence in line managers than top bosses and CEOs of smaller companies have a better trust index than leaders of large corporations.

Interestingly, women have a higher level of trust in their senior bosses when they first join an organisation, but this faith in them diminishes over time.

In the private sector, leaders in the media are least trusted, while retail bosses scored the highest trust index.

I spoke to ILM chief executive Penny de Valk about the results. Listen to the interview above.

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