With its grand architecture, and seemingly arcane rules, the Institute of Directors (IoD) has often felt more like a gentleman’s club than a political body. However, under director general Simon Walker, the renowned business institution is getting a bit of a shake-up.
Previously characterised as a rather safe organisation, the IoD has been far more forthright in recent times. It has praised SportsDirect boss Mike Ashley for turning down his bonus, “recognising the governance concerns associated with [his] pay plan”, and warned the Burberry board that shareholders had “fired a warning shot” over pay concerns. Last week it gave its backing to a Labour proposal on lengthening the time period for clawing back bankers’ bonuses.
While some of those interventions could be characterised as anti- business, today the IoD is criticising the so-called Google Tax – an attempt by the government to tax supposedly diverted profits. Its head of taxation Stephen Herring says the policy “represents a dramatic breach with the government’s own road map on tax.” The attacks on bad capitalism give it the political cover for such potentially controversial comments.
It’s all part of a modernisation strategy. A source familiar with the situation says: “It’s no coincidence that the IoD is becoming more bullish, especially about things like bad capitalism and bad companies and Libor and stuff like that. At the same time it’s doing things like letting people in without a tie, and revamping its buildings”.
Director general Simon Walker says the organisation “needed a reframing” when he took over in 2011, “so it became more helpful for startups, younger people, people who are coming into business.” He also says that its membership has become more diverse in terms of “gender, but also age”, and there is greater racial diversity too.
Walker says the organisation has become strident because ”I think people that believe passionately in the free market, as I do, they have a special responsibility, when they see it abused, to stand up against it”.
Since his appointment, Walker has begun replicating part of the strategy he deployed successfully in his previous role at British Venture Capital Association, where he helped turn around the negative public perception surrounding private equity. The industry’s PR problem had reached a nadir when Permira chairman Damon Buffini became the subject of a GMB Union campaign after thousands of AA staff were fired when it was part- owned by a private equity firm.
The IoD also appointed its first female chair, Lady Barbara Judge, last week. She has been chairman of the Atomic Energy Authority, deputy chair of the Financial Reporting Council, and a commissioner of the US Securities and Exchange Commission.
Recent spats between political parties have put business at the centre of the election debate. Walker confirms that while the IoD will not endorse a party, it will not shirk from political battles either. He does not want the organisation to be seen as a “knee jerk, right wing group, because we’re not”, and cites immigration as an example of its liberal credentials. A source also confirms that while Walker is “less friendly to the Labour party” than his predecessors, he is not a eurosceptic.
Times are changing at the IoD, and it seems to have found its political voice just in time for the election.