The corridors of power
The Times has just published its annual Power 100 league which charts the connections between FTSE directors.
Points are awarded according to market cap and type of directorship, so the chief executive of one of the big oil or mining companies who also has a couple of non-executive directorships would score highly.
The top scorer this year is Sir Tom McKillop, chief executive of AstraZeneca. He is also a non-executive director of BP and, until December, Lloyds TSB. Last year’s winner, Sir Robert Wilson, then executive chairman of Rio Tinto, has switched to a non-executive portfolio, and loses top spot.
One of the notable features this year is the growing demand for finance directors to serve as non-execs. The requirements of Higgs and Sarbanes-Oxley have put a premium on financial numeracy. So it is that Ken Hydon, finance director of Vodafone, ranks fourth in the Power 100 league, bolstered by non-executive positions at Tesco and Reckitt Benckiser. John Buchanan, former finance director of BP, sits on the boards of AstraZeneca, Vodafone and BHP Billiton.
In interviews, the Power 100 individuals are quick to knock down suggestions that they are part of a cosy club. Certainly, the boardroom is a very different place to the 60s or 70s, when ‘who you knew’ was a ticket to a seat. Yet the same names do crop up, and the rest of us might well suspect some sort of cosy arrangement.
I don’t believe that directorships are shared among friends any more. The problem is, there is a finite number of people willing and qualified to take on high-profile non-executive directorships. With horror stories like Equitable Life kicking around, why should newcomers take the risk? The private equity route is so much more attractive.