Tuesday, May 27, 2008

Why Companies Recruit Politicians to their Boards

City AM has an interesting article today asserting that a company's value rises if it has a politician on its board who is associated with the governing party. If they are right, expect to see a whole raft of ex Labour politicians lose some lucrative directorships and be replaced by people with good Tory connections.

14 comments:

Browned off said...

Patricia Hewitt, worst health secretary in memory, got her snout in the trough at Boots after an indecently short period following her 'resignation'.

Anonymous said...

Like you woldn't do the same? "Glasshouses" and "Stones" spring to mind!

vervet said...

anon@7:17 ...

You really don't get Iain's point, do you.

If he wished you 'Happy Christmas' you would find a reason to diss him.

If you've got nothing more constructive to say, please keep quiet.

Richard Nabavi said...

Of course companies are eager to recruit those brilliant Labour politicians who have shown such good judgement and managerial skill. Imagine being able to put on the CV achievements like:

'Active member of the Millennium Dome team'

'Made a major contribution to the 2007 budget'

'Simplified taxes and benefits'

'Helped plan the reconstruction of Iraq'

'Was responsible for data security in HM Revenue & Customs'

'Senior experience of procurement in the UK armed forces'

'Made a major contribution to the Prime Minister's PR strategy'

'Responsible for getting maximum value out of NHS budget'

The list is endless.

Anonymous said...

Snouts in the EU trough is the other route to a wealth after mainstream politics. The House of Lords is stuffed with them.

javelin said...

Iain, you're just twisting the knife for fun now.

Alex said...

And their evidence:
Baroness Symons at BA
Patricia Hewitt at BT
George Robertson at Cable & Wireless
Mary Francis (who?) at Aviva

Each of those companies have gone through problems and the appointment of a minor political figure will have made no difference to the share price. More likely the appointment of a lightweight director means they don't need a commercial problem solver.

Casual Observer said...

... and the sooner the better.

haddock said...

do the companies hire members of the 'ruling' party for their brilliant business minds ? or perhaps for the political version of insider trading ?
I think I know which..... so it is not surprising that MPs close to the decision makers are favoured

Anonymous said...

browned off 6.40

Don't worry. You'll have the huge satisfaction of seeing Boots plc go tits up when KKR can't re-finance their debts.

It's the poor bloody infantry I'll feel sorry for!

Chris S said...

Good try but the research is about the USA and the Republican Party, not the UK and New Labour (despite the misleading spin in the article).

Chris Paul said...

Strangely enough there are a fra greater proportion of Tories with boardroom jobs.

Minekiller said...

6.40pm

and I - along with many I know, no longer shop at Boots. Hewitt wón't last long anyway.

The Remittance Man said...

a company's value rises if it has a politician on its board who is associated with the governing party.

So we have concrete evidence that the market adjusts to reflect the financial value of political connections. Not something we should be happy about, surely.