UK Plc’s obsession with negotiating in private is bad for its own reputation, as well as short-sighted, ineffective and ultimately detrimental to shareholders and the national interest. Privately, firms and their bosses will express their worries, often cogently; but they will never go on the record. They never want to be quoted.
The result is that when a big story breaks – such as the EU’s cap on bonuses, which will make the City less flexible – no CEO or senior director ever wants to speak out. Companies prefer to stay silent. It is usually left to groups such as the British Bankers’ Association or the CBI to do the heavy lifting, and they do a good job. But the message would often be far more powerful and effective if it were to come from actual business leaders and companies, rather than their surrogates. And almost unbelievably, it has been known – after an especially serious attack on an industry – for even the representative body to refuse to go on the record.
In some cases, one ends up in a situation where only think-tankers or journalists can be called upon to express their views. Of course, the companies in question say they are worried about how the media will treat them – but how exactly do they think their cause will be depicted if they refuse to defend themselves or put their side of the story? No wonder banking and other industries are so disliked. Once again, business is proving to be its own worst enemy, and betraying the interests of staff and investors.
There is just one exception to this sorry, cowardly state of affairs, and that is airline bosses. They are always delighted to speak out: Willie Walsh has been campaigning vigorously for an extension to Heathrow, for example, slamming the government’s position on this matter, Sir Richard Branson is often happy to express his views, and Ryanair’s Michael O’Leary is as outspoken as it gets. Not for them excessive deference or caution. As a result of their ability to interact directly with the public, through the media or even advertising campaigns, these chiefs have often succeeded in getting their message across.
It’s in that light that I look upon King’s onslaught on banks, one of his parting shots before he retires. He complained that banks were trying to lobby George Osborne to get rules changed, and that they in turn had put pressure on the Bank of England’s prudential regulation authority. At issue was whether the lobbying was too extreme, King’s contention, or whether it was just a case of banks exercising their democratic rights, and a sympathetic government choosing to relay the message. Part of the argument, of course, is that the government cannot set up an independent regulator and then tell it what to do; if it wants to retain that power, it should change the rules.
But the real problem is somewhat different. If the banks believe that being forced to hold more capital will reduce the loans they can make, why don’t they say so at every opportunity? Why don’t CEOs actually make that case and try to sell it directly to the public? Why don’t they give on the record interviews, or pitch cogent, hard-hitting op-eds (rather than the endless, dreary nonsense they sometimes try and get published)? For its own sake, business needs to engage the public much more directly.
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