- Companies are often criticized for being short-term.
- Compared with the constant rotation of ministers, boardrooms are models of stability.
- Constantly changing dramatic characters make business relationships difficult
Businesses are often criticised for their short-term vision. But compared to the constant turnover of ministers over the past decade under the Conservatives and the coalition, many FTSE 100 boardrooms look like models of stability.
The average tenure of a FTSE 100 boss is five and a half years, according to research by investment experts AJ Bell.
This is significantly longer than the lifespan of most politicians business leaders have had to deal with in recent years, and indeed longer than the full term of a parliament.
Around a fifth of FTSE 100 executives have been in the role for more than a decade. The best – Simon Wolfson at Next and Pascal Soriot at AstraZeneca, for example – are also among the longest-serving.
It is no coincidence. Nigel Wilson, who recently retired as chief executive of Legal & General after more than ten years at the top, attributed his ability to take a radical approach to investing in infrastructure in the UK to his confidence that he would remain in the role for a long time.
‘Stable’ partners?: The new government must find a way to stop the constant ministerial turnover
By the time most businessmen and women reach the top, they already have a lot of experience in their field.
Compare this to politicians. As our sister paper, The Mail on Sunday, reported yesterday, since 2015 there have been seven chancellors, eight City ministers, nine business secretaries and nine work and pensions secretaries, before the new Labour appointments.
The constant change of characters makes it difficult to deal with companies. It is necessary to give explanations and defend arguments in a seemingly endless loop.
In autumn 2022, when he served a brief four-month term as business secretary, I went to visit Grant Shapps in his Victoria office. The walls were still hung with pictures of bewigged gentlemen belonging to his predecessor, Jacob Rees-Mogg, who served an even shorter term of less than two months.
I hope the new government will find a way to stop this constant turnover. To be fair, many of those occupying key positions have been out of office for some time.
There have also been interesting appointments of experts such as Sir Patrick Vallance as science minister and James Timpson in prisons. As director of the shoe repair chain, he has shown a keen interest in the rehabilitation of offenders.
The drawback of this approach is that outsiders may know their issues perfectly, but they are not familiar with the dark arts of politics. But however intelligent people are, it is folly to expect them to master an issue as complex as pensions overnight. Building relationships with officials, working out requirements and then making them a reality also takes time.
The revolving door creates constant friction and confusion. It is also harder to hold ministers who are here today and gone tomorrow to account. Former Conservative leadership candidate Rory Stewart, who held five ministerial posts between 2015 and 2019, has spoken out against the “pass the parcel” philosophy and suggested a minimum two-year term for ministers.
The recent merry-go-round is linked to the post-Brexit Tory revolts, but the underlying problem is deeper: people are often moved from one place to another for ideological reasons or infighting, rather than because of their abilities.
The UK subscribes to the cult of the talented amateur in politics and many other areas. The Labour Party says it will put the national finances in order through growth. To have any chance of success, it will need sustained commitment and focus from ministers, not a motley parade of characters.