RUTH SUNDERLAND: Firms should look beyond the small pool of middle-aged male ‘talent’

In what parallel universe did it seem a good idea to appoint Kevin Loosemore, the top boss at battered software business Micro Focus, to be the chairman at De La Rue?

Did anyone think investors at the bank-note group would be delighted at his arrival?

And what about Micro Focus’ long-suffering shareholders, who might well be miffed that their very well-remunerated executive chairman will be spending chunks of his time elsewhere?

The move could indicate a desire to loosen ties with the company, coming after a large share sale, where he cashed in around £12million earlier this year before the recent collapse,

Whatever the reasons, taking on another job at a time like this, when investors have every cause to be anxious, looks a little bit like contempt. 

For the benefit of readers who haven’t closely followed the story, Micro Focus is on the brink of being relegated from the FTSE 100. 

Its shares are down 60 per cent since their highs in 2017, and it is struggling to digest an $8.8billion deal to buy the rump of Autonomy’s assets that year.

De La Rue is also in a fearsome mess, having lost a contract to produce UK passports. Long-term investors may well rue the decision back in 2011 to reject a 935p a share bid by French rival Oberthur, as they are now worth just over £2.

Why, then, has Loosemore been appointed? He worked at De La Rue in the past, therefore knows, or used to know, the business. 

One could argue he did well at Micro Focus until it went horribly wrong with the Autonomy deal. But it stretches credulity that he is uniquely qualified and that there were no other suitable candidates who were less busy.

To state the obvious, it is not ideal for any individual, however brilliant, to try to fire fight two serious corporate crises at once.

Bad enough when the situation arises inadvertently, as it did for Peter Long. Earlier this year he stepped down as chairman of Royal Mail to concentrate on trying to save Countrywide, the struggling estate agent chain he also chairs. But it’s just plain bonkers to walk into double trouble as a deliberate policy.

Why has Micro Focus let him do it? Probably because, as executive chairman, a role that goes against best governance practice, he dominates his fellow directors and they were too weak to stop him.

Misguided appointments like these come about through a mixture of vanity – these prolific chairmen never seem to doubt their ability to do several difficult jobs at once – and a lack of imagination on the part of boards and headhunters. 

As our sister paper The Mail on Sunday reported this weekend, there are more men called Michael chairing FTSE 100 companies than women. 

It doesn’t help that John Allan, chairman of the CBI, is also the chair of two Footsie businesses, Tesco and Barratt. He is held in high esteem, but it’s not the ideal template.

If only companies would look beyond the shallow, small pool of middle-aged male ‘talent’, they would make far better appointments. Multiple chairmanships are not against corporate governance codes but they are undesirable and unnecessary.

New dawn

A newbeginning for Maggie Brereton and Ina Kjaer, the two star female partners who left KPMG after alleged bullying and who have set up their own deal advisory firm, Eos, named after the Greek goddess of the dawn.

They say they will try to attract other talented women and minorities who felt excluded by the macho mainstream deal culture, of all-night working sessions and too much testosterone.

They also say they will concentrate on aftercare, the challenges that arise after a deal is done and that mean many end up destroying value. 

It will be an interesting experiment to discover whether deal-making can be done as well or maybe even better sans the machismo, and whether clients will sign up to the proposition. Good luck.

Woodford watch

The boardroom shake-up at Neil Woodford’s Patient Capital trust and the departure of one of his allies begs the question of why the man himself has not been fired by the supposedly independent board. 

Perhaps they don’t want to destabilise the situation further. But surely there is a case for the Financial Conduct Authority to eject Woodford from the fund empire that bears his name, and instal an independent investment manager to clean up the mess, as happened with the banks in the financial crisis. 

It would also be an opportunity to save on the millions of pounds of investors’ money draining away in fees.