IT WAS inevitable that the departure of Ian Marchant as the boss of one of the country’s biggest utilities would attract negative headlines, but not because he’s done a bad job.
On the contrary, the chief executive of Scottish Hydro-owner SSE has helped create one of the country’s best-performing businesses, so naturally he was castigated in the media because, allegedly, he will leave with a multi-million pound pay-off.
Criticism was predictable because he and other utility bosses have overseen big price hikes for customers. So, he should be made an example of.
Aside from the fact that his pay-off has not been decided, it was overlooked that Marchant has created the UK’s second-biggest supplier of electricity and natural gas and the biggest generator of renewable energy. At the height of the banking crisis it became Scotland’s biggest company and also stands alone among the indigenous electricity companies as remaining UK-headquartered: no mean achievement during two decades of pan- Europe consolidation.
Apart from a fine for misleading doorstep selling last year, and the problems encountered at the Glendoe hydro scheme, the company’s track record is formidable. SSE is one of just five FTSE 100 companies to have delivered a real dividend increase every year since 1999 and is ranked tenth in the index for total shareholder return over that period.
Yet even after 11 years at the helm of a 20,000-employee company, Marchant could not have expected universal praise and his successor Alistair Phillips-Davies will get the same treatment – as long as prices continue to rise – and in spite of whatever he achieves. In a survey published a couple of weeks ago, utilities emerged above banks as the most disliked companies among small business customers and public opinion cannot be far behind.
Much of this comes down to their image as monolithic and remote corporations. On this point, Marchant did not help himself by emulating his predecessor Jim Forbes in refusing interviews and appearing somewhat smug about SSE’s pricing structure and its place in the energy sector. Marchant was not keen on international expansion, a decision that may or may not have been to SSE’s advantage, though he probably deserves the benefit of the doubt.
His chairman Lord Smith rates him the best chief executive he has worked with, an endorsement that carries considerable weight from someone of his experience.
Marchant will doubtless pop up in a number of non-executive roles once he departs in the summer and will be a valued addition to any board.