Money managers under the microscope
Unstable, greedy, selfish….
Not the words ringing in my ears as I leave for work every morning, but City of London Investment CEO Barry Olliff’s take on the UK financial sector.
Olliff is taking his company from AIM and onto the main market next month and the new governance guidelines which will apply to the firm as a result have sparked a frank assessment. Take it away, Barry:
“From my experience of the City, when I consider remuneration and remuneration packages, I’m taken in the direction of instability, greed and selfishness…”
“…the City is made up of many selfish people who are encouraged by management, and management’s approach to remuneration, to develop egotistical tendencies. This culture of greed, in my opinion, manifests itself often via a lack of risk awareness, poor team spirit and significant key man risk…”
“…we are not looking for freedom fighters. Rather we would say it is better to appoint decent people, who can genuinely work in a team environment, than appoint just no1′s. We often say, better to appoint a good no2 who is a decent person than a no1 who is greedy, political and does not consider the maintenance and development of the brand…”
Oof… and there’s more. Olliff is clearly not convinced by the fashion for deferred bonuses, designed in theory to protect clients from short-termist bankers and asset managers.
“Is this really the way to go? Why not pay someone on time for their work. Or, is this meant to delay their departure, a sort of enforced loyalty? Or is it that there is insecurity regarding the profits that the individual has created? If this is so then surely the focus should be on the quantum, measurement and the quality of the corporation’s earnings.”
Here’s hoping all those ticking ‘explain’ on their ‘comply or explain’ forms for the new governance code are this forthcoming.