One of president Trump’s favorite sayings is “Your Fired.” Now Prime Minister Theresa May is stepping into Trump’s shoes and promising to shake up the British bad management situation. In reality, this is just fake statements made by a weak Prime Minister seeking ways to improve her image.
UK construction company Carillion collapsed after its executive board stole money through large bonuses and wages, depleting the company’s pension fund and sending thousands of low paid workers to unemployment. This is not the first time that executives and managers of companies abuse their responsibilities and destroy the company that they control all for lining their pockets.
What makes it even worse is that these thieves end up getting even better postings and are employed by other companies, adding insult to injury and most probably lining their pockets again with their constant selfish greed and avarice.
A good manager is someone that leads their department to success; a good executive is someone that leads their company to profit. It’s perfectly OK to give them large wages and bonuses if they prove successful. It’s another to give them the same result when they are just bad.
Since company management directly affects the national economy, this issue is now sitting on the Prime Ministers desk, and she intends to put a stop to the abuse set by many executives. A number of reforms are being viewed including personal responsibility, regulating wages and bonuses and connecting them to perform as well as securing pension funds from abuse.
One prime example of terrible injustice is the case of BHS, which went into liquidation. Sir Philip Green (Sir no less!) sold it for £1, but he made a steal by taking £586 million through company dividends. I use the slang “made a steal”, since if the company would pay dividends based on performance and not the whim of a greedy executive, then the dividends would be honestly earned.
However the story is no about Sir Philip Green, it is about Prime Minister Theresa May and how she should deal with executives that abuse their position to gain personal wealth instead of trying to strengthen their businesses.
It is time to regulate public traded companies. It is time to set limits of employment packages for executives, and it is time to make the executives personally liable. It is also time to link wages and bonuses to metrics, where the executives are given a basic income and an additional bonus set by specific milestones and targets. The wages and bonuses should not be thousands of percent more than the lowly paid workers.
Prime Minister May might make a difference, but she will need to overhaul the regulations for public traded companies and set new rules that limit the use of public investment to line the pockets of executives. The average investor wants results are profits, why would the investor suffer such atrocities that are performed by bad managers such as Sir Philip Green. By the way, the 100 MP’s voted to strip his knighthood in 2016, but it was not enforced by the government at that time, and guess who was Prime Minster then; Theresa May.
Bottom Line: Prime Minister May has no intention of doing anything, she allowed Green to retain his knighthood which is proof that she is just making bombastic statements to bolster her weakened position. There will be no changes and executives like Green will continue to enjoy the stupidity of the British public trading market.