Boardroom power play at C&W masks strength of its heritage

.The C&W spat between Ross and Young might help rivals short term, but the company is bigger than both of them. George Pitcher is joint managing director of media consultancy Luther Pendragon

Whatever emerges from the non-executives’ forced arbitration between Cable & Wireless executive chairman

Lord Young of Graffham and chief executive James Ross, the principal issues of opportunity facing the company remain unaltered.

It is, therefore, worth freezing these in time, before the analytical environment becomes too muddled in the internecine board battle.

Let me first dispose of the board battle. It is said, with some credibility, that the “differing styles” of Young and Ross have become impossible to accommodate concurrently.

The company, “ain’t big enough for the both of them”. Which, given the global spread of C&W’s activities, means that there is not a company on earth that is big enough for both of them.

It is the implementation of global strategy that presents the problem.

Ross was brought in to develop strategy in 1992 with a particular focus on the Far East, European and North American markets. A task he has yet to complete, and is anxious to do so.

Young, by contrast, is a cosmopolitan opportunist. His old patron, Margaret Thatcher, was a striker of deals wherever they could be struck and, for Young, old habits die hard.

Hence his propensity for taking C&W into deals in Russia, Latvia, Kazakhstan and Israel. Young’s critics would have us believe that these emerging-economy deals are difficult to control and resource – his supporters rejoin that a deal is a deal if it delivers value.

Anyway, the non-executive directors, exhausted by this dynamic tension, thought they had reached a resolution last week whereby Young would retire in 15 months on his 65th birthday, while Ross would go quietly next March.

Ross, it appears, has an appetite for finishing the job and delivered the ultimatum that it should be Young that goes in March – or Ross will go immediately.

That is the conundrum with which C&W’s executives and non-executives are wrestling. Over the next couple of days, attention will focus on who has won the Young/Ross bout. Less attention, I venture, will be granted to where C&W was heading before the scrap emerged.

There is, after all, a much broader canvas of C&W activity which could easily become obscured later this week in all that talk and endless copy about executive winners and losers.

C&W is not about the boardroom battles in London – it is about a unique federation of global telecoms operations that offers multinational businesses a multinational, integrated telecoms service.

That will be as true later this week, next week and next year as it is today, whatever the outcome of boardroom squabbles and however Young and Ross emerge from them.

C&W is 150 years old; it has a heritage of internationalism born of the federation of companies around the world that now constitute its network. The man who delivered C&W to the new world was Eric (later Lord) Sharp.

He took a state-owned entity, dining on Victorian achievement in the shape of the trans-Atlantic cable, and capitalised on the colonial past to create a kind of telecoms commonwealth.

As the likes of BT from Britain and AT&T from the US seek to strike international alliances – such as those required to take them into the soon-to-be-deregulated German market – C&W already has a global superhighway and the experience of being a multinational to offer to those who are, or who aspire to be, multinationals themselves.

Not only that but C&W has formed a joint venture with Veba, called Vebacom, to go for the specific opportunity that German deregulation presents.

So the international telecoms market operates at two levels. There are macro developments, which is a market C&W is well positioned to corner, given its world federation. And there are micro opportunities, where C&W competes with the best of the rest.

Much of which might temporarily be buried beneath the outcome of the boardroom battle. Squabbles may provide some sort of short-term boost to competitors such as BT and AT&T, but the fundamental strength of C&W – from Hong Kong to the US via Europe – is not going to go away because of a boardroom power-play.

All I would say is that Lord Sharp took a monster by the scruff of the neck. It might take many hands to hold that monster down, but only one pair should hold the scruff.



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