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February 26, 2015

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gastro george

As was pointed out, I think in the Guardian Letters section, if some MPs have so much time then maybe they should volunteer at their local Citizens Advice Bureau rather than taking up a directorship.

On the other hand, you have people like Frank Field who have spent so much time working with poverty that it seems that he's come to hate them all.

From Arse To Elbow

Miliband has actually been quite deft in translating an issue of lobbying (i.e. influence bought on a time & materials basis) into one of paid directorships and therefore corporate governance.

The root of the problem goes back to the Cadbury Report of 1992 (following Polly Peck, BCCI and Robert Maxwell), which sought to improve governance standards without statute, preferring "comply or explain", aka brazen it out. This recommended increasing the number of non-executive directors, which created a gravy-train for the usual City suspects.

Many companies split their management between an executive board, that handled all operational decisions, and a main board (with majority NEDs) that handled public and investor relations. The result has been the "not me, guv" excuses of the directors when malfeasance comes to light (HSBC are just the latest of many).

Over time, MPs started to be attracted to NED roles, largely because having one on board was regarded in the Russian idiom as "krysha", i.e protection. The rationale was that an MP would want to avoid reputational damage, so s/he would keep the business on the straight and narrow, governance-wise. Because the market recognised this, an MP as a NED boosted "soundness". Their technical input was irrelevant and their usefulness for lobbying was merely a bonus.

The ethical issue isn't MPs having paid directorships in small family firms, or even NED roles where they can genuinely bring industry expertise to bear, but the venality of those who tart themselves out to FTSE-listed firms as a form of PR. This encourages the mindset of "what's good for business is good for UK Plc".

An Alien Visitor

"They got people to play a simple dictator game.."

Oh so that explains why politicians and the rich and powerful are so cosy! Do me an effing favour.

rogerh

Seems to me the problem is endemic with government. Governments seem to lie on a continuum from tribal chief through warlord, emperor and president/prime minister - but one constant factor is the close support network of family, fighters, courtiers, barons, knights and party members. If you want influence go talk to them and take gifts of goats, slaves, gold, directorships, consulting fees whatever.

As you say, a shorter leash is the answer, but who holds the leash - and do they like goats or old or consulting fees...

formula57

I am much more virtuous than I had supposed for I permit my local MP no exposure to me whatsoever, thereby not compromising his impartiality. If only all of us followed such an approach, those inside the Westminster bubble would be freed (as I now see) to act solely in our collective best interests.

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