George Trefgarne makes an interesting point:
British companies don’t make acquisitions any more,
apparently. Why? I think there are two reasons. One is that many
British managers are simply not as motivated as the rising generation
in Asia, Russia or even Spain.
Sometime during
modern Britain’s hand-wringing about race, gender, public schools, fat
cats, corporate governance etc, we lost our bottle. And all too often
the sort of person who rises to the top is not an entrepreneur but a
glorified bureaucrat, who lacks vision and is in the grip of
consultants, lawyers and PR men.
The most talented
managers work for private companies, owned by venture capitalists,
where they can earn a slice of the business if they succeed.
This
is not just a failure of character or of individual leadership. It is
also a systemic failure. Directors of listed companies here now find
themselves besieged by regulations and codes of practice.
Quite possibly so but there could also be another reason. Perhaps some of our CEOs and FDs are actually financially literate? Shocking as it may be to have to contemplate, perhaps they’ve actually read some of the research? You know, those endless studies that show that takeovers rarely produce gains for the shareholders of the company doing the taking over?
Could it be that we in the UK suffer less from agency problems? That managers are actually aware of their fiduciary duty and thus don’t launch value destroying bids?
Naah. Happy as I would be if it were true I’m not sure I have enough confidence in our managerial class to actually believe it.
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