Monday, October 10, 2005















FE Specials

FE Education

Urban Property

Monthly Roundup

Saturday Feature

Asia/South Asia




National Day of Australia

57th Republic Day of India






Site Search



Ministers take business lessons
Alison Maitland

          It is a little-known fact that Geoff Hoon, defence secretary during the invasion of Iraq and now leader of the House of Commons, spent more than three weeks experiencing life inside International Business Machines (IBM) in the early 1990s.
The former lawyer, who admits that reading a balance sheet "might be beyond me", sat in on meetings of the UK board, visited IBM plants and attended a course for graduate recruits. The experience, while not endowing him with the financial basics gave him an enduring interest in the technology industry and some management lessons.
"I was enormously impressed with the care large companies take to recruit the right people and prepare them for the job," says Mr Hoon, who did his IBM work experience before and after being elected in 1992. "That's always been in the back of my mind in relation to being a minister."
IBM taught him the importance of giving employees in big organisations the freedom to make decisions. "In the Ministry of Defence I recognised it would be absurd to try and micromanage every decision. Sometimes that meant that things would come out of the system ... that you won't have known about. That's a good thing. It means the system is more robust."
Experiencing a large business from the inside also helped him better understand the way defence companies presented bids for contracts from the MoD -- "not something you're likely to have much experience of as a politician".
Mr Hoon's introduction to IBM came through the Industry and Parliament Trust (IFT), a non-partisan charity with a remit to forge greater mutual understanding between the worlds of business and politics. About 600 MPs, MEPs and peers have completed "fellow- ships" during the trust's 28-year history, including another member of the current cabinet, David Blunkett, secretary of state for work and pensions, who did a stint at BT Group in the early 1990s.
The idea of two-way "exchanges" between business and parliament -- the trust also runs programmes for company executives to understand the legislative process in the UK and European Union (EU) -- has been exported to a dozen countries, including Finland, France, South Africa, the US and Thailand.
The former Soviet republic of Georgia is the latest country to introduce a programme under the auspices of the International Association of Business and Parliament, the umbrella group set up by the IPT in 1995. Sally Muggeridge, chief executive of the trust, says the mandate for the Georgian scheme is to support good governance and economic development "through building transparent and non-corrupt relationships between businesses and legislators".
While corruption is a big concern for emerging democracies, developed economies are not immune. How does the trust prevent relationships between companies and politicians from being subverted? Some participating companies are involved in controversial activities, subject to heavy regulation or dependent on government contracts, including BAE Systems, British American Tobacco, British Nuclear Fuels and Ladbrokes, the betting company.
Ms Muggeridge says the trust gives both sides clear guidelines at the outset. "Fellows operate under strict codes of conduct as members of parliament and, while the IPT cannot be responsible for any future relationship an MP may have with any organisation, there is no evidence in the history of the fellowship programme that advantage has been taken by either company or MP," she says.
Mining is another controversial activity, and one that Gisela Stuart, Labour MP for Birmingham Edgbaston, was eager to learn more about. When she started her fellowship at Rio Tinto in 1998, she knew little of the company other than what she had read in the satirical magazine Private Eye -- "and that was never positive".
Unlike many of her Labour colleagues in the past, she has never had a problem with large companies per se, she says. "It's what large companies do with their power that interests me."
In 2001, she made eye-opening visits to two South African mining sites, Palabora and Richards Bay. Talking to the manager responsible for a network of shafts beneath the vast open-pit Palabora copper mine, she was struck by the responsibility he bore for a capital investment in an unproven technology with very tight profit margins and enormous safety considerations.
"It made me realise they must sometimes look at politicians with their 'motherhood and apple pie' statements with utter amazement," she says. "I said to him: 'If I ever get cast onto a desert island, I'll take you as my luxury.'"
Large mining companies such as Rio Tinto often find themselves performing the role of local government, providing infrastructure such as roads and healthcare. "It's not because they want to provide it," she says. "It's because there's no one else who's going to step in' "
As a member of the convention that drew up the European constitution, Ms Stuart hit the headlines two years ago when she criticised the process and expressed doubts that the constitution would meet the needs of the enlarged EU. In her work on EU enlargement, she says she drew on what she learnt at Rio Tinto about fighting corruption.
"Everybody was subject to the same rigorous tests, including the chief executive. The visit brought home to me the tremendously important role large companies like Rio Tinto play in terms of instilling values of proper corporate governance."
Ever-changing political careers are an administrative challenge for the trust. Ms Stuart had to put her fellowship on hold for two years when she became a junior minister. Jack Straw, foreign secretary, and John Prescott, deputy prime minister, are among politicians whose study programmes have been suspended, according to the trust's website.
Baroness Bottomley, a headhunter and former Conservative health secretary, already had an insight into business when she did her fellowship at United Biscuits in 1987 because her father, John Garnett, was director of the Industrial Society.
At UB, however, she experienced boardroom practices, industrial relations, new technology and the reality of factory closures at close hand. She remembers bridling at comments about "the men in the directors' room and the girls on the shop floor" -- something that helped kindle her interest in equality initiatives. The Department of Health was the first big government organisation to join Opportunity 2000, the employer-led campaign for gender equality, she points out.
She says the trust plays an important role in bridging the gap in understanding between industry and parliament.
"Many [in business] complain about excessive red tape and regulation without appreciating what is often great pressure on politicians to step in, possibly fuelled by a press campaign," she says. "Being politically savvy is frequently helpful."
FT Syndication Service


  More Headline
Importance of earthquake preparedness
'Good governance' remains elusive
Ministers take business lessons
Japan may be walking again, but it still needs crutches

Print this page | Mail this page | Save this page | Make this page my home page

About us  |  Contact us  |  Editor's panel  |  Career opportunity | Web Mail





Copy right @ financialexpress.com