Terry Murden: Alex Salmond has the chance to impress big business

FIRST Minister Alex Salmond addresses the Institute of Directors Convention at the O2 Arena in London this week in what could mark a turning point in his relationship with big business.

The meeting is one of the major set-piece events in the business calendar, attracting an array of big-hitters to the platform and an audience to match. As such, Salmond will speak alongside, among others, Paul Walsh, of drinks firm Diageo, and Moya Greene, who heads the Royal Mail.

Salmond’s focus, of course, will be the case for independence and how it offers an opportunity rather than a threat to investors and those wanting to grow.

It would be a surprise if he did not list the companies that have poured money into Scotland in spite of warnings that separation will force them to stay away.

He will surely talk up the tantalising prospect of a more tax-advantageous country, of quicker and more localised decision making best suited to local circumstances.

His preparation was not helped by the announcement last week by Korean firm Doosan Power Systems to withdraw a £170 million investment in renewables research in Renfrewshire that would have created 1,700 jobs. Given his faith in renewables to “re-industrialise” Scotland, Salmond will respond to any nervousness about the sector by pointing to the commitment of others and to Doosan’s own pledge to stick by its wider investments in the country.

Above all, the First Minister needs to use his address to present himself as a statesman and to tackle the continuing sense of uncertainty that hangs over his government’s plans.

Business hates a vacuum and wants Salmond to move swiftly from flag-waving sentimentalism and closer to explaining how an independent Scotland will achieve his ambitions in a country that shows few signs of shaking off its record of low growth and low business creation. Without doing so, uncertainty will turn to scepticism.

Shareholders are getting tougher

THE guns are still firing in the battle over bankers’ pay and there will be more shots across the bows of Barclays on Friday despite concessions announced last week.

New performance targets for chief executive Bob Diamond and finance director Chris Lucas were meant to placate angry shareholders who have threatened to vote down their pay packages which include a £5.75m payment to Diamond to cover a tax bill when he relocated from the US to London.

Standard Life will support the new arrangements, which subject a greater proportion of bonus payments to clawback, but many investors say the changes don’t go far enough. There is talk of fireworks at the AGM, though the likelihood is that the pay deals will go through with a significant protest vote.

What is encouraging is that shareholders are showing an increasing willingness to take an active role in governance issues.

Pressure for a change on pay is spreading beyond these shores. It seems Barclays revised the payouts to its top team following Citigroup’s humiliating defeat last week over payments proposed for its top executives.

It is unlikely that Barclays’ failure to appease its own shareholders will force a further climbdown, but shareholders are at last showing they will no longer be taken for granted.

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