The Great and Good are fully represented on FTSE 100 boardsThe Great and Good are fully represented on FTSE 100 boards


A Lord on every Board.

Once upon a time, there was a very clever man, who was much in demand during his political career as a 'fixer' and mediator between often difficult people.
After his retirement from political life, he went to the House of Lords and followed the example of many senior politicians in making his services available as a non-executive director.
We refer to Lord Wakeham, who was once reputed to have held fourteen directorships at the same time. Thirteen have been forgotten but one stands out - Enron - Lord Wakeham was the chairman of the Enron Audit Committee, the sub-committee of the board that is supposed to oversee financial probity and ensure that the independent auditors were doing a good job. Alas, although the board of Enron seems to have felt that a Lord on the Board would be a sign to the world of straight dealing and probity, it appears that the possession of a peerage and a successful political career does not offer a guarantee of any of these good things!
Lord Wakeham seems to have blended quietly into the background since Enron, but the habit of fronting the board with lords seems to have found a new life with the gaggle of Russian and ex-Soviet state companies that are currently invading the London Stock Exchange.
We hope that the experience will be better for investors than Enron - but have our doubts.

The fact that these companies are not queuing up to conduct their IPO's in New York, Frankfurt, Paris or other stock markets that might be argued to have more robust regulatory regimes than London - as one seasoned observer, Max King, investment strategist at Investec commented: Partygaming (Gibraltar based) and Kazakhmys (Kazaksthan) are also refugees. With at least four (now many more) Russian companies lining up for flotation, London is well on the way to joining Panama and Liberia as a 'flag of convenience' location.

So who are these new Lords on the Board?

One wonders what the promoters of stringent corporate governance think of all this. Here's one view: Bill Browder, chief executive of Hermitage Capital said: "Russian shareholders are cash-rich and credibility poor, so if they can get an important person on their board it's a good thing. If important people ask me if they should accept posts on Russian boards, I always say 'No', because most of the time they will have no ability to change what the Russian shareholders will do, but will still have some liability for what happens".
We wonder why they all do it?

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