In The Spotlight: Multiple-Job Executive Directors:

So what exactly did Theresa May achieve as Prime Minister? According to the Sunday Times on July 21st, she became desperate in her final few days in office to be remembered for more than her “failed Brexit policy”. Which is why, during the week preceding her resignation on July 24th, she announced a flurry of new proposals – among them a law committing the UK to net zero carbon emissions by 2050 and a £2 billion pay increase for some UK public sector employees.

As a result of what the Daily Mail columnist, Claire Ellicot, described on July 19th as May’s “farewell gift”, police officers, dentists and consultants will get 2.5% more, soldiers 2.9%, teachers and other school staff 2.75% and senior civil servants 2%. Quite how the new Prime Minister, Boris Johnson and his Chancellor, Sajid Javid,will fund this additional expenditure is not yet clear, though as Ellicot noted, the relevant Whitehall departments are likely to be told to find the cash from their existing budgets.

Will this extra money really relieve the financial pressures on the people it is designed to help? A survey conducted by the Police Federation of England and Wales (PFEW), cited by Jamie Grierson, the Guardian’s Home Affairs correspondent, has shown that 9,500 police officers took on second jobs during 2018 because they were struggling to make ends meet. These include a variety of roles such as taxi driving, photography, plumbing, gardening and beauty therapy.

On 17th June, the Oxford Mail journalist, Tom Williams, reported that firefighters in Oxfordshire are being forced to seek second jobs after years without a proper pay rise in order to pay their mortgages and utility bills. Many teachers are having to do likewise, often – as Mary Bousted, General Secretary of the National Education Union told the Guardian’s Donna Ferguson – because their low net pay means they can barely even afford their rent. The Council of British International Schools (Cobis), observed Ferguson, estimates that around 15,000 teachers leave the UK each year to work in education abroad – an exodus, declares Bousted, for which the Government is largely responsible.

The Financial Times commentators, Sarah O’ Connor and Vanessa Houlder, have pointed out that, due to real-term wages having fallen 8% since the financial crisis of 2008, more people across the country are cramming extra work into evenings, weekends and even their lunch hours to supplement their main incomes. A poll of the users of “People per Hour”, a website for online freelancers, has indicated that around 25% are doing extra work to cover a payday loan or credit card bills and another fifth to finance childcare costs.

Ben Chapman, a contributor to the Independent, has cited Henley Business School research that suggests 40% of UK workers have set up a business “on the side” due to the increasing insecurity of their day job. The precise numbers are uncertain as apparently many “moonlighters” don’t declare their second incomes to the tax authorities.

Taking a second job – or even several – has long been standard practice among the UK’s “elite”, for rather different reasons. George Osborne, the former Conservative Chancellor of the Exchequer, for example, currently has seven, among them as editor of the London Evening Standard, two different roles with Stanford University in California, advisor to the US fund managers Blackrock (for which he’s reputedly paid £650,000 a year working one day a week) and chairman of the Northern Powerhouse Partnership.

This isn’t unusual: Indeed, the media consultant Peter Cunliffe remarked in an article for The Times that “going plural” has become the fashionable career choice for executives of a certain age. “What could be more agreeable (he asks) than taking on three or four non-executive posts for £60,000 each and flitting from one boardroom to another to dispense wisdom?” Investors, however, he adds, are beginning to rebel against directors who take on too many non-executive roles – a phenomenon known as “overboarding”.

On 14th July, the Guardian highlighted stakeholder concerns that the chairman of Scottish Power Energy (SSE), Richard Gillingwater, may not be devoting sufficient time to the company because he’s also chairman of the £274 billion asset manager Janus Henderson and a director of Whitbread PLC, the UK’s largest hospitality company.

Other prominent business figures and industrialists who have become the focus of comparable disapproval are: Sir Nigel Rudd,chairman of the aerospace and defence group Meggitt as well as of BBA Aviation and Sappi, the Johannesburg-listed paper conglomerate; Barclays Chairman Sir Ian Cheshire who was retired from the board of the department store retailer, Debenhams, in January; ex Diago CEO Paul Walsh who resigned as an HSBC Director following unease regarding his “portfolio of directorships” such as with the Compass Group and Avanti Communications.

Stephen Martin, Director General of the Institute of Directors, has emphasised that organisations need to ensure their board members don’t spread themselves too thinly and have sufficient time available to effectively fulfil their duties. The UK Corporate Governance Code (July 2018) stipulates that candidates for a Board should disclose, prior to their appointment, any other significant business commitments they may have.

Filed under: Society | Posted on July 29th, 2019 by Colin D Gordon

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