The Week UK - 03.08.2019

46 CITY

THE WEEK3August 2019

Commentators

The last time the London Stock Exchange tried to pull offabig

deal –2016’s failed tie-up with Deutsche Börse–“all hell broke

loose”, says Alistair Osborne. So what should we make of its

“latest caper” to buy the data outfit Refinitiv forawhopping

$27bn? One comforting difference is that this isn’t “a politically

fraught exchanges merger”. Another is that investors seem to

like the idea, marking shares up 15% to an all-time high. Even

so, this is “quiteapunt” for the LSE’s new boss, David

Schwimmer. Refinitiv is the renamed Reuters business, “shorn of

the news agency and other bits and bobs”, and its “big thing” is

international data and analytics provision. If the LSE does pull

off the deal, it will be strikingablow for independence–the

combined outfit is big enough “to pretty much kill” any future

takeover by the owners of the New York and Chicago exchanges.

But that may well encourageapre-emptive strike. Berenberg

reckons there’sa“one-in-three chance” this deal will flush out

another bid for the LSE. The fun and games haven’t ended yet.

Corporate chieftains are often accused of behaving like

“sociopaths”, says Andrew Ross Sorkin. But don’t blame them –

blame the law. Bosses can’t help behaving in ways that are often

detrimental to wider society because they’re charged with acting

in their companies’ best interests alone–which usually means

making money by whatever means possible. Yet former corporate

lawyer Jamie Gamble is convinced it need not be this way: he has

produceda“provocative” prescription for change, based on first-

hand experience of what he calls the “complex network of

horribles” in corporate America. Gamble’s plan is to force

companies to havea“conscience” by enshrining ethics in

corporate constitutions, and to buttress that with the threat

of facing shareholder lawsuits if they fail to live up to them.

“Binding” provisions, agreed by stockholders, might include rules

on how to treat employees, communities and the environment.

There are potential downsides–not least the threat that boards

would simply devise toothless rules to satisfy the requirements.

Worse, it could meanadeluge of lawsuits that end up draining

company resources and time. Even so, any plan that encourages

companies to “haveabit more empathy” is worthasecond look.

The new Chancellor, Sajid Javid, appears “eminently suited to the

job”. But perhaps the more important consideration, says David

Smith, is whether he’ll provea“lucky” Chancellor. In particular,

will he get to “enjoy something denied to both his predecessors:

the return to normal rates of productivity growth”. This matters.

Had UK productivity grown in line with its long-run trend, it

would be about 20% higher than it is now, translating into a

£5,000 boost for annual private sector wages, or an 18% pay rise

for most ordinary Britons. Productivity is certainly duearevival.

In fact, there’s “a sense we could be on the edge of something big”

thanks to the prospect, “so far largely unrealised in this country”,

of asignificant boost from the new technologies of artificial

intelligence and robotics. Assuming he “can hang around” long

enough, Javid could ride that tide. In the meantime, there’s much

he could do to improve his luck. His pledge to tackle “investment

starvation” viaa£100bn infrastructure fund isagood start.

“Few aspects of office life are more dispiriting than hot-desking –

the penny-pinching ploy that strips people of their own desk and

casts them out toanoisy, chaotic wasteland of shared work

spots,”says Pilita Clark. It’s easy to see why companies think it an

attractive option. In places like London or Hong Kong, where real

estate prices are “stratospheric”,asingle workstation can cost as

much as $20,000ayear. And as “workstations are often empty,

because workers take leave and get sick, the temptation to bring

in shared desks is obvious”. Yet no one seems to consider the cost

in terms of sapped productivity. According to one British study,

“people doomed to hot-desking waste an average of two weeks a

year, just looking foraplace to sit”. That doesn’t include the time

it takes to get set up and “figure out where the people you need to

talk to might be perched that day”; or, indeed, the hit to staff

morale. Perhaps the people we should pity most are the HR police

who have to oversee the wretched system, constantly patrolling

the office for “signs of encampment”. Time to end this madness.

Gerard Lyons

The former economic adviser

to Boris Johnson when he

was mayor of London is now

the “bookies’ favourite” to

become the new Bank of

England governor, said Jill

Treanor in The Sunday

Times. If so, expectashake-

up. Currently an economic

strategist with Netwealth,

Gerard Lyons has written

about “the scope for more

borrowing,areview of the

Bank’s 2% inflation target

andarethink of regulation”.

As an outsider and “a

believer in the opportunities

of Brexit”, he could be just

right for the job in the new

status quo, said Jeremy

Warner in The Sunday

Telegraph. On the downside,

he has “no experience of

runningalarge organisa-

tion” and may be viewed as

“a political appointment”.

For all Lyons’ strengths as

“an unorthodox economist”,

it won’t be “an easy sell”.

Andrew Griffith

After famously issuing his

impromptu expletive against

business last year, the new

PM “has serious bridges to

build”, said Andrew Pearce

in the Daily Mail. Step

forward Andrew Griffith–a

big cheese at Sky, withakey

role to play in “the court of

King BoJo” as “business

envoy”. Griffith has already

shown his loyalty: Johnson

used his £9.5m Westminster

town house asacampaign

base. Described as “sharp-

suited and urbane”, Griffith

hasareputation for getting

things done. Having joined

the broadcaster in 1999, he

rose to become COO and

CFO and helped bring about

its dynamic transformation.

But his appointment won’t

please office furniture-

makers. Griffith has banned

chairs from his office

because he prefers to stand,

hoping, thereby, to ensure

“better energy levels and

shorter conversations”.

Tricky times

call for alucky

Chancellor

David Smith

The Sunday Times

How to get

sociopaths off

the board

Andrew Ross Sorkin

The New York Times

Big deal for the

London Stock

Exchange?

Alistair Osborne

The Times

The hidden

hell of

hot-desking

Pilita Clark

Financial Times

City profiles