Private equity gets the policeman it deserves

No sooner has he exited KPMG to get his feet under the chairman’s table at BT, than he accepted another job ­ chairing the oversight committee that will enforce the new code of practice for private equity players laid out in the Walker report.

As if being chairman of BT wasn’t hard enough, Sir Mike has landed himself with, potentially, one of the most difficult regulatory posts in the City ­ though he’s not exactly a regulator. Private equity is expected to get a ‘comply or explain’ set of guidance, but it will remain a code of practice and is also, effectively, self regulation.

And Sir Mike, in the past, has always made a point of saying that ‘independence’ is an important part of any regulatory structure. While that might put him in an uncomfortable position acting as enforcer of the Walker report, it might also make him the best man to do the job.

He certainly has the personal skills. He is tough, straight talking, has worked with regulators and politicians in the past and most of all he has experience of working in a tight spot, if you recall KPMG’s run in with US law enforcers over the now notorious tax shelter schemes. It is a measure of how well Sir Mike dealt with that episode that he can be considered for a regulatory position now.

That’s not to say it will be easy policing the sector. Private equity players are a tough lot who don’t like being pushed around. He will have the benefit of public opinion on his side but he will still have to wield his considerable diplomatic skills to make sure his new job is a success. It is in the long-term interests of private equity that the new code works and they will need to co-operate with Sir Mike for it to do so.

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