In a recent article, GlaxoSmithKline Chairman, Sir Philip Hampton, talked about rogue companies causing problems in British business, however he failed to mention that the company he chairs- GSK- has been one of the most rogue companies (in terms of ethical, legal, and moral transgressions) of recent times.
When you’ve read through the hundreds of examples of GSK going rogue with ethics- then perhaps read through Sir Philip’s article with your tongue firmly in your cheek, and of course with a great sense of irony and absurdity…
Rogue companies will always exist, says GSK chairman
Rogue businesses and bad bosses will always exist no matter how hard British companies and politicians work to stamp them out, according to Sir Philip Hampton, the chairman of pharmaceuticals giant GlaxoSmithKline and the former chairman of Royal Bank of Scotland.
Sir Philip, who last year published a report on corporate governance and gender diversity, told MPs that it is crucial for independent directors to be able to control domineering executives.
“In overall terms the UK structure for corporate governance is actually pretty good – it is not universally, but we always will have the Sports Directs or the Philip Greens,” Sir Philip told the Business, Energy and Industrial Strategy (BEIS) select committee.
“I don’t think there are any structures that can eliminate it, but the overall structure of governance in UK is admired pretty much globally.”
The recent scandals surrounding the collapse of BHS shortly after it was sold by Sir Philip Green and the treatment at staff at Sports Direct have shaken confidence in some of the biggest names in British business.
Sir Philip Hampton, who has been given the same award, said that business bosses should not routinely be given gongs.
“The rewards for being in business should be primarily financial, and other awards and appreciations probably should be more directed to people who are not getting financial rewards,” the GSK chairman said.
“I think to get both the financial awards and the other marks of recognition is a bit too easy. The honours system has moved away from businesspeople getting awards, and that is right.”
He also told the MPs that the best way to create more diversity in business is to set targets and deadlines, prompting the machinery of companies to act rapidly.
But he added that there may be too much focus on boards, which are dominated by non-executive directors giving only part-time service, when companies are run on a day to day basis by executives.
“Boards have made a lot of progress, but boards are overwhelmingly non-executive now in our corporate governance framework, and having more women on boards is not the same as women having proper, effective business careers,” he said.
“The bit that we’re missing is the focus on executive committees. Companies are run by their executive committees, the full-time people with the best-paid jobs who really decide most things, when a typical board member is two or three days a month, which is not the same thing. In executive committees there is still noticeable female under-representation.”