Cable cure ignores man in the middle

Vince Cable’s plans to curb excessive boardroom pay (your report, 23 January) will fail as it relies solely on shareholders’ goodwill and does nothing to address the entrenched business culture and uneven distribution of power found in many UK corporations.

It is a simple fact that if executives deliver good profits, or even promise to deliver these in the future, shareholders have neither the incentive nor the inclination to cap top salaries and bonuses.

What is actually required is a wholesale change to our corporate culture in the UK. This can be brought about by various means but one decisive way would be to tackle many companies’ obsession with the position of the corporate manager as over the previous two decades efficiency drives and more flexible working conditions have reduced the power of middle management while the executive board structure has largely remained unchanged.

I do not believe that bringing in one or two new board members, as Mr Cable plans, will have much impact as the overriding situation has resulted in a steady redistribution of power towards top executives.

Taking this back to first principles we see that to manage is to organise or regulate; to regulate is to control by rule but is subject to various restrictions.

So by definition the role of the modern manager is basically subject to ever more controls, restrictions and conformity – hardly conducive to advancement, innovation and empowerment.

This gradual subjugation of middle management makes it slightly easier for senior executives to inadvertently yield to the power of the shareholder and accept the remuneration package on offer but this often leads a sense of inertia among more junior members of a company.

What we really want to achieve is a business culture where everyone in a company buys into a joint advancement strategy, and, besides, if this generates more company profit it is in everyone’s interest including executives, employees and shareholders. Would it therefore be a step forward to prohibit the title of manager and replace this with a more empowering title of innovator or enabler and thus address the power imbalance found in many of our corporations?

What better way for the Scottish Government to take the lead over the Westminster Government when it comes to addressing excessive boardroom pay?

Brian Pope

Beechgrove

Lockerbie