Glasgow Games chief urges firms to seize golden opportunity

Published on Thursday 21 October 2010 15:37

LORD Smith of Kelvin, the 66-year-old grandee of Scottish business, gave up full-time City working in 2002 but he is still flying here, there and everywhere in his capacity as chairman of Weir Group, Scottish & Southern Energy and, most recently, chairman of the Glasgow 2014 Games.

He is just back from the Commonwealth Games in Delhi and is brimming with stories from India where - despite the chaos of unfinished accommodation and venues - he says organisers delivered a "very happy" set of games. "As one person said to me, it was a bit like an Indian wedding," he says. "As the bridegroom steps over the threshold, they're still hammering nails and painting."

Despite agreeing to take on the Glasgow job two years ago, Delhi was the first time Lord Smith had experienced an international athletics meeting. He is honest about the shortcomings of the Games - the late finish of major building work, overzealous security - but he's not about to gloat that Glasgow will be a walk in the park by comparison.

"There are still going to be issues (at the Scottish Games]," he says. "There are things we have to do: with Hampden Park we're building it (the surface] up two metres. That's not done very often so we'll have a few structural issues as well."

Given that the Glasgow Games will be based predominantly at existing facilities, Smith knows most of his challenges are likely to be of a financial kind. Commonwealth protocol dictated that he and John Scott, the organising committee's chief executive, could only recently start sponsorship talks - at a time when the economy is staring into the barrel of a loaded gun. The pair have to find 42 million in corporate sponsorship at a time when most companies are maintaining a tight rein on costs.

Lord Smith admits they have their work cut out but he is hopeful Glasgow can piggyback on sponsorship deals from the London 2012 Olympic Games. "Of course it's a challenge, but companies tend to think several years ahead. When I was appointed, I thought the Olympics might be a bad thing for us, that it might be a drag and it would use up a lot of sponsorship potential and we'd be crowded out. Actually, it looks like it's now going to be quite the reverse. There are a lot of big sponsors of the Olympics who would like to see their connection with sport carried on at a lot less expense."

Given his wealth of business experience, it's easy to understand Lord Smith's relaxed attitude. If he had been given a medal for every corporate position he has held over the years, he'd have a bigger trophy cabinet than cyclist Sir Chris Hoy.

He spent 20 years climbing the greasy pole in the Square Mile - 14 years of which were spent at the Industrial and Commercial Finance Corporation, the private equity investor which became 3i. He was vice-chairman of Deutsche Asset Management, served on the boards of the Financial Services Authority and Bank of Scotland, and was governor of BBC Scotland for five years.

But it was during his time at the helm of Morgan Grenfell Private Equity in the 1990s that Lord Smith found his name in and out of the headlines as he dealt with the fallout of the Peter Young rogue trading scandal - the cross-dressing financier who ended up costing his employer 435m in compensation payouts.

Then there was the Nicola Horlick debacle, where Lord Smith found himself on the receiving end of a war of words with the former darling of the Square Mile after she walked out, taking with her a team of the firm's finest dealmakers.

He gave as good as he got - and still does - but Lord Smith is concerned that Scotland is lacking in confidence when it comes to competing for business and growing its firms.

Having joined the House of Lords in 2008 as a crossbench peer, he refuses to comment on the impact of last week's comprehensive spending review and anything "pertaining to be political".

But he will this week tell business leaders at the Institute of Directors' annual Scottish conference at Loch Lomond to stopping beating themselves up as firms such as Aggreko, Wood Group and his own Weir Group have proved that Scots companies can make a name for themselves on the global stage, even in the toughest of economic environments.

"As a nation we lack a wee bit of self-confidence at times but you can always make money out of economies," he says. "It's obviously going to be tough if government expenditure is down and if there is a tightness in the availability of finance for banks. But there are still markets around the world that are doing well. You work out what you want to do, you tell your people and you empower them to get the thing done."

He says the private sector north of the Border may struggle to fill the jobs and growth gap which is expected to open as a result of the CSR but he insists Scotland shouldn't talk itself down. "I'm by nature an optimist and Scottish firms will prosper. Mind you, I'm a Partick Thistle supporter so my glass is always half full."