How is the Bank of England’s “reflecting diversity, choosing inclusion” mission going? Let’s remind ourselves of the ambition as it applies to gender diversity: a tripling of the proportion of women in senior roles to 35% by 2020. Thursday was not a good day. From a shortlist comprising four women and one man, the man got the gig to be the next member of the high-profile monetary policy committee
To be fair to the Bank, it played no role: the chancellor, Philip Hammond, made the appointment. It is possible that Mark Carney, who often points out that he is the 120th in an unbroken line of male governors, is privately tearing his hair out. To be fair also to Jonathan Haskel, professor of economics at Imperial College Business School, he was a perfectly decent candidate; his expertise in productivity could be useful in the current climate.
Yet this feels like a huge missed opportunity by the Treasury, whatever it says about how it contacted 44 women to apply for the post. The next opportunity to address the 8-1 male bias on the monetary committee may not arise for another four years, given the tenures of the current crew. It is only Carney who is definitely departing soon and the betting odds heavily suggest the 121st governor will also be male. Meanwhile, the 13-strong financial policy committee contains one woman. And 10 of the 12 members of the Bank’s governing court are men.
The Labour MP Rachel Reeves, chair of the business select committee, called the latest appointment “truly staggering”. In a week in which some of the business world’s ludicrous justifications for male-dominated boardrooms were exposed in a government-commissioned report, one can only agree. Haskel, no doubt, will pass his confirmation hearing in front of the Treasury select committee with flying colours. It would more interesting to hear the MPs grill Hammond.
O’Toole’s exit from FirstGroup was inevitable
The miracle is that Tim O’Toole lasted eight years as the chief executive of FirstGroup. An innings of that length usually counts as decent when the share price travels in the right direction. At FirstGroup under O’Toole, the journey has been from 300p to 90p. Shareholders haven’t even had the consolidation of a dividend for the past half-decade.
The source of half of FirstGroup’s woes is the top-of-the-market $3.6bn cash takeover in 2007 of US group Laidlaw, owner of an impressive school bus operation but also the Greyhound long-distance coach business. That deal happened before O’Toole’s arrival but his attempts to deal with the debt hangover never hit the mark. The thumping £615m rights issue in 2013 only semi-repaired the balance sheet and the option of selling Greyhound was resisted, with the word “iconic” being grossly overused. It is only now, with FirstGroup taking a £277m goodwill impairment against Greyhound, that a sale is being contemplated amid grumbles about competition from icon-toppling US budget airlines.
The other write-down definitely relates to events on O’Toole’s watch. A sum of £106m is being charged as an “onerous contract provision” on the TransPennine Express rail franchise to cover expected losses out to 2023. This looks to be a straightforward case of overbidding in 2015 to retain the franchise. There was nothing wrong with passenger revenues at TransPennine last year – they were up 10%.
In the circumstances, O’Toole’s resignation was inevitable after the latest grim results. The shame is that for the first 20 years of its life FirstGroup was a story of stunning success as it grew from a few bus routes in Dundee to become the UK’s biggest transport company. Recent chapters have involved scraps with activist investors and, last month, a vague bid approach from the private equity group Apollo Management, which was dismissed by the board as “opportunistic”.
Despite FirstGroup’s many woes, saying no to Apollo was justified. There should – still – be a decent business lurking within. It does, though, require the next boss to change a corporate mindset that the Unite union fairly condemned as “managed decline” under O’Toole. Find some rigour – quickly.
Pensions Regulator chief lacks fear factor
Lesley Titcomb, the chief executive of the Pensions Regulator, can take a hint. She won’t seek to renew her four-year contract when it ends next February. Mind you, MPs were hardly subtle in pointing out the exit door. The “current leadership” of the organisation may not be equipped for cultural change, said the two committees probing Carillion’s collapse, adding that “a tentative and apologetic approach is ingrained”. The work and pensions committee called next year’s corporate plan “very modest in scope”.
Many in the pensions industry think it’s all terribly unfair. The worst mistakes at BHS and Carillion were made before Titcomb became boss. Wasn’t the government giving mixed messages on how quickly companies should close pension deficits? Hasn’t Titcomb also managed the logistical challenge of rolling out auto enrolment?
Well, yes, some sympathy is in order. But regulation is a rough business and a pensions enforcer needs to be feared in the outside world. Titcomb, perhaps out of loyalty to long-serving staff, never was.
