After penning a counter-intuitive thesis on Independent Insurance’s Michael Bright last week, I’m in danger of becoming something of a friend to the reviled if I jump to the defence of another beleaguered individual. Readers might expect me to start suggesting that William Hague fought a faultless election campaign, or that Gordon Strachan is a deeply misunderstood football manager.
But I can’t help speaking up for Gerald Corbett, ex-Railtrack boss and current short-term executive chairman of retail chain Kingfisher. Well, if not exactly speaking up for him – in the sense of saying that he’s a jolly good chap who should be put in charge of, say, the London Underground now that Bob Kiley faces the chop – I would like to point out some of the more irrational arguments that are concealed by the kind of self-righteous hysteria pursuing him from Railtrack.
Let me first say that I believe that a culture of accountability is a good thing. Politicians of late have been pitifully slow to carry the can for their mistakes, with the notable exception of Peter Mandelson (twice). It is right that business people are rather more willing to fall on their swords when they fail to meet their shareholders’ expectations.
Corbett’s may be the first case of a chairman having to resign for failing to meet the expectations of another company’s shareholders. In case anyone hasn’t noticed, Corbett isn’t chairman of Railtrack anymore. He is chairman of Kingfisher. But because Lord Cullen’s report into the Paddington rail disaster censures Railtrack for its “institutional paralysis”, there is a body of opinion calling for Corbett to resign from Kingfisher, although he wasn’t directly criticised in the report.
What is the natural development of this argument? Perhaps I should resign this column should something I have written elsewhere cause institutional paralysis among those who have read it. Or perhaps Roger Holmes should resign as UK retail managing director of Marks & Spencer should it be discovered that Kingfisher, where he held a senior role, suffers from institutional paralysis.
Actually, Kingfisher does suffer a form of paralysis. Every time Kingfisher’s redoubtable chief executive, Sir Geoff Mulcahy, thinks he has someone to preside over the Woolworths demerger a development elsewhere and beyond his control threatens to take them away. It was Corbett’s job to lead Woolworths away from the Kingfisher group. Similarly, Holmes’ precipitate departure from Kingfisher delayed the Woolworths project.
So, should Holmes resign his position at M&S now that things appear to have gone wrong at Kingfisher again? Of course not. That would be bonkers. Almost as bonkers, in fact, as Holmes’ decision to quit Kingfisher for M&S – but, heck, it’s a free country. And we might remind ourselves of that as we call for the resignation of a man from the chairmanship of a retail chain that has nothing to do with a report into a railway management company, in which report the chairman is not even criticised.
I note that Corbett, who must be getting used to standing down, made a statement at the start of this week to the effect that he would go if required. “The interests of the business [Woolworths] are paramount and I will do whatever is necessary to ensure the demerger’s success,” he said.
Those are clearly well chosen words. The interests of Woolworths and, indirectly, of Kingfisher’s shareholders, as Mulcahy must appreciate more than anyone, are paramount. Not the interests of a bunch of corporate vigilantes braying for Corbett’s blood from an entirely separate corporate circumstance.
As is usually the case with vigilantes, of course, their high moral outrage conceals far baser motivating instincts. This is not an attempt to make one former top man accountable for the shocking state of the UK’s railways. It is a grubby attempt to seek revenge for Corbett’s £1.3m pay-off from Railtrack.
The fact that Corbett reportedly received £600,000 compensation from Grand Metropolitan when it merged with Guinness to form Diageo points to the motivation for calling for his head to be envy, not accountability.
Whatever the levels of Corbett’s competencies or incompetencies are irrelevant. Employment contracts are drawn up by lawyers, under supervision of non-executive directors, and approved by shareholders through remuneration committees. They may have clauses limiting compensation under some circumstances, such as gross professional misconduct. There can be no evidence that Corbett breached such a clause. So you can’t simply decide to rewrite a contract to suit a populist hindsight.
Like Mandelson, Corbett resigned twice but, unlike Mandelson, only one resignation was accepted. His first resignation came in the wake of the Hatfield train crash, but it was widely accepted that he should remain in situ to establish levels of culpability at Railtrack. He did so and accepted those responsibilities when they became apparent. This is not a man to whom accountability is a mere trifle.
The difference between being a hero and a villain by presenting the human face of accountability after a transport disaster is a narrow one. Sir Michael Bishop pulled it off as chairman of British Midland after the Kegworth air crash. Corbett might have done the same with Hatfield. Had he done so, life would be very different for him, Railtrack and Kingfisher.
George Pitcher is a partner of issues management consultancy Luther Pendragon