the times | Tuesday December 21 2021 41
Business
Two senior managers at JD Wether-
spoon who joined the pubs group as
shift managers in the 1990s have been
appointed to the main plc board as
employee directors.
After a “thorough selection process”
that elicited more than 100 applica-
tions, the company also announced the
appointment of two managers as
associate employee directors.
It said that the appointments, for an
initial three-year term and effective
immediately, had been made because
“it was felt that the company would
benefit from having more pub experi-
ence at board level”.
The two appointments with full plc
director status are Debbie Whitting-
ham, 52, regional manager for the West
Senior managers at BrewDog have
sought to draw a line under allegations
of a “toxic culture” after completing an
in-depth review of the way the business
is run.
In June the Scottish brewer, which is
mulling a possible flotation, was hit by
allegations of sexist and misogynistic
behaviour towards female staff and
“toxic attitudes towards junior staff”.
A group of rebels calling themselves
Punks with Purpose was particularly
critical of James Watt, the company’s
co-founder and chief executive, accus-
ing him in an open letter of presiding
over a culture that left many workers
“burnt out, afraid and miserable”.
After the completion of the review,
Allan Leighton, 68, the newly appoint-
Lewis could be the
tonic for Glaxo
F
or once, activist investor
Elliott had nothing to say.
And neither did its pygmy
twin Bluebell Capital. Not
even some flower power
jibe about sacking Sir Dave Lewis
before he’s started in the job. Could
that be because the former Tesco
boss looks vaguely credible as the
new chairman of GlaxoSmithKline’s
demerged consumer health wing?
Perhaps the activists will yet find
flaws with “Drastic” Dave. But he
looks plausible enough. The sort of
hire, in fact, to focus attention on
the group’s medicine cabinet of
consumer brands: old faves like
Panadol, Beechams and Sensodyne;
the Voltarol gel that came with its
Novartis deal; and the stuff from
2018’s joint venture with Pfizer, in
which Glaxo has a 68 per cent stake,
spanning America’s No 1 painkiller
Advil and tons of Centrum vitamins.
Together, they chip in about
£10 billion in annual sales, with
operating margins doubling over the
past six years to 22 per cent.
Analysts value the business at about
£45 billion, or £30 billion-plus for
Glaxo’s share. Conglomerate
discounts aside, that’s a big chunk of
Glaxo’s market cap. The entire
group, including the core pharma
arm led by chief executive Dame
Emma Walmsley, is valued at
£80 billion — on shares Omicroned
down 1 per cent to £15.92 yesterday.
Glaxo plans to retain an initial
20 per cent stake, too. So plenty is
riding on Lewis and, of course, the
consumer wing’s boss Brian
McNamara. They must make the
investment case for the standalone
outfit, with a capital markets day
due in the first quarter of next year.
And it’s only here that you could
have quibbles with Lewis’s record.
Having decamped from Unilever
to Tesco in 2014, he arrived to
unearth a £250 million accounting
black hole. Soon he was aghast to
find that the supermarket chain had
close to zero profits margins, not the
15 per cent ones he was used to at
the consumer brands outfit, which
have since gone up a bit. His
turnaround included billions of
pounds’ worth of overseas disposals
and the Booker buy, too. And, no
question, operations improved. But
despite his efforts and £30 million in
pay, the share price flatlined.
He’ll have to preside over a better
performance at Glaxo, not least at a
self-styled “world leader” consumer
health group, promising “superior,
sustainable sales growth”. Indeed,
Glaxo chairman Sir Jonathan
Symonds gets a bit snooty about the
peer group, suggesting comparatives
should be Procter & Gamble and
L’Oréal — a level above Unilever
and Reckitt Benckiser. Still, Glaxo
does have what Goldman Sachs
analysts call “category-leading”
positions, including in Sensodyne
oral care and its painkiller range.
So, for his £700,000-a-year pay,
Lewis must ensure the troops
deliver. Plus convince consumer-
focused analysts and investors to
put a higher value on the business
than Glaxo’s present ones, mainly
there for the fancier drugs.
Apart from demanding Walmsley
reapply for her job, Elliott has also
been urging Glaxo to look at selling,
rather than demerging, consumerhealth. There’s been talk of interest
from Blackstone, Carlyle and CVC.
It’s not impossible. But it’d be a big
bite for private equity. And Glaxo
sees more value in a spin-off. Hiring
Lewis drives that message home.Standard deviation
T
hree down, two to go. The
Christmas rush to fine Britain’s
Big Five banks is showing no
signs of letting up. After a
£265 million whack for NatWest and
£63.9 million for HSBC, this time it’s
the turn of Standard Chartered. So
has it also failed to spot the money
launderers popping in — once again
provoking the Financial Conduct
Authority? No such luck. This is a
far more techie affair. And just the
sort of thing you’d expect, too, from
the wonks at the Bank of England’s
Prudential Regulation Authority.
They’ve stung Standard
Chartered for £46.6 million: a record
fine for a “PRA-only enforcement
case”, presumably one where they
don’t bring their mates along. The
bank’s offence? Five errors on the
“US dollar Gap 2 Metric” front:
some sort of “survival” game the
PRA likes to play where banks have
to prove they have enough US
liquidity to last 91 days even when
they’re locked out of heaps of
funding markets.
Anyway, the bank screwed up its
calculations five times between
March 2018 and May 2019, even if
three of the errors “did not result in
a breach of the PRA’s expectations”.
The other two, though, included a
spreadsheet howler where the bank
ingeniously mixed up the plus and
minus signs. The upshot? It
overstated its liquidity position by
£7.9 billion. Not telling the PRA
about it for four months and then
waiting until April Fool’s Day 2019
made the regulator even crosser.
Naturally, Standard Chartered now
says it’s improved its controls and is
even more “committed to accurate
regulatory reporting”.
Anyway, the big question: who’s
next? Will it be the PPI mis-selling
kings Lloyds Banking Group, or
Barclays, home of the former boss
who hung out with Jeffrey Epstein?
Surely the regulators can come up
with a seasonal fine for them, too.Davos slopes off
N
ot again. How will anyone
survive two whole years
without Davos? Still, look on
the bright side: even if Omicron’s
done for the Swiss ski-sloped hot air
jamboree, is this not a chance for
Brexit Britain?
Even if the world’s locked down,
the No 10 garden is traditionally
available to host cheese and wine
work events, where Dominic Raab
pretends the guests are “all in suits”.
Indeed, Marks & Spencer, Ted Baker
and Moss Bros might even like to
sponsor the alternative Downing St
Davos. And what better place for
Boris to schmooze some billionaire
into footing the decorating bill for
another house — should he have to
leave his present abode pronto?[email protected]business commentary Alistair Osborne
Brewer draws line under culture row
Dominic Walsh ed chairman, and Blythe Jack, 47, the
deputy chairwoman, issued a joint
message to its 2,300 staff last night. It
said: “Having read the review, we don’t
subscribe to the characterisation of the
company set out in the open letter and
we know from having spoken to numer-
ous crew members, neither do many of
you. But it is also clear that BrewDog
has made mistakes and the key now is
to learn from them, address them and
be better.”
The review included an online sur-
vey of almost 1,000 present and former
employees and one-on-one interviews
with more than 400. Other issues
addressed were an under-resourced
HR function and a lack of career pro-
gression and mental health provision.
The firm also has hired 600 extra staff.
The duo said that while it had been a
challenging period for BrewDog, there
was “incredible momentum inside the
business today” and in 2021 it had
grown by about 25 per cent year-on-
year, helped by 16 bar openings.
“Strong brands provoke strong emo-
tions,” they added. “We have not always
got it right and, at times, this had had a
negative impact on our culture. We
draw a line under that today.”
Watt, 39, announced the launch of
measures including a workplace code,
a 3 per cent salary rise and an indep-
endently run ethics hotline. He “fully
accepted the findings of the review”,
adding: “I accept I haven’t always
looked after our people as well as I
should have done.”
He said that he would work with
Leighton, his mentor, to “be the best
leader I can be”.Managers shift to Wetherspoons’ board
Dominic Walsh Midlands, who joined the company in
1992, and Hudson Simmons, 50, area
manager for Sheffield. The two
associate employee directors are Will
Fotheringham, 47, regional manager
for the Manchester area and an em-
ployee since 1998, and Emma Gibson,
35, pub manager of the Imperial in
Exeter. She joined the group as a bar
associate in 2004.
Wetherspoons, founded in 1979, sells
moderately priced ales and a range of
meals. It had 44 pubs in 1992 at its
flotation and today has about 860 pubs
in the UK and Ireland.
Tim Martin, its chairman and
founder, said that a successful pubs
company depended on gradual im-
provements, based on suggestions from
employees. “Pub and area managers
have always participated in weekly
decision-making meetings, which distil
suggestions from the front line,” he said.
“The appointment of employee direct-
ors will extend this approach to board
meetings and will help to preserve the
culture of the company for the future.”
Martin, 66, recently has been critical
of the negative impact of corporate
governance rules, claiming that the
nine-year maximum tenure for non-
executive directors had “a deleterious
effect” on the DNA of a company.
Last week, the Wetherspoons’ boss
warned investors that restrictions to
slow the spread of the Omicron Covid
variant would hit its first-half results,
making them “loss-making or margin-
ally profitable”. Shares of JD Wether-
spoon, which twice raised new equity
during the pandemic at £11.20 and
900p, fell 6½p, or 0.8 per cent, to 845p.catastrophic figures
clearly show that
trading levels are now
so low that without
government support
many businesses will
not survive into the
new year and jobs will
be lost,” she said.
“Cancellations have
annihilated cash
reserves.”
Retailers, which also
were gearing up for
their biggest weekend
of the year, suffered in
similar style as people
stayed at home, with
shop visits 20 per cent
below pre-pandemic
levels. Footfall over
Saturday and Sunday
fell by 8.5 per cent in
central London and by
6.4 per cent in regional
cities compared with
the previous week,
figures from
Springboard, the retail
data counter, showed.
As a result, customer
numbers over the last
shopping weekend
before Christmas were
19.9 per cent lower
than they were in 2019,
while shopping centre
visits were 27.2 per cent
down on pre-Covid
levels.
Analysts suggested
that shoppers hadbought Christmas
presents early after
warnings about
potential shortages of
toys and electronics.
There was also a
suggestion that
shoppers had used
Black Friday to buy
cheaper presents, with
official figures showing
that retail spending
rose by 1.4 per cent in
November.
Concerns that
Omicron could mean
the shopping season
ends with a whimper
prompted Harrods to
bring forward its
Boxing Day sale by ten
days in response to
“the ongoing trading
realities”.
Diane Wehrle,
insights director at
Springboard, said:
“The nervousness of
shoppers about making
in-person shopping
visits inevitably meant
that large city centres
lost out to smaller high
streets, particularly
over the weekend,
when footfall declined
from the week before
in central London and
large cities outside the
capital while rising in
market towns.”
Retail parks stayed a
resilient part of the
sector, with many
shoppers choosing
them for their
proximity to
supermarkets and free
car parking.Harrods has decided to
bring forward its winter
sale by ten days to
encourage shoppers,
while hospitality venues
expect a gloomy holidaySTEPHEN CHUNG/ALAMY