Fame at last. This week Private Eye published a letter of mine on the subject of Moneysupermarket.com Plc. This was in response to a somewhat inaccurate article on companies ditching their advertising agents. This is what the letter said:
“Sir, Contrary to your article on companies ditching their advertising agencies in EYE 1466, where it is stated that Moneysupermarket.com lost money last year, the truth is that they actually made profits of £78.1 million.
However, as an investor in the company, I applaud the action of the new CEO in firing their advertising agency. I always thought good advertising was about promoting the merits of the product or service you were offering. But Moneysupermarket’s recent campaigns, such as a prancing “twerking businessman with a giant arse” as you put it, was nothing of the kind. Perhaps the new(ish) CEO (he has been there a year) took a similar view. Particularly when the financial results for last year were indeed disappointing, albeit revenues and profits were up 4% – but that’s not much more than inflation.”
Private Eye often publish some revealing articles on financial matters and this latest edition contains one such by “Slicker”. It covers the “existential crisis in corporate governance” which he says has increased since the financial crisis of 2008 with no top bankers, auditors, lawyers or regulators in court. The article covers many of the scandals that have come to light in that period, and this is a particularly pertinent comment therein: “Non-executive directors, who supposedly oversee the executive directors, have too often become an over-rewarded mafia of mediocrity, exhibiting all the signs of Stockholm Syndrome, their captors being the domineering CEOs to whim they never say no”.
He suggests some remedies which include “a corporate vicarious liability law” as in the USA, a Sarbanes-Oxley style law, and the banning of LTIPs. All well argued and it’s certainly worth reading.
Roger Lawson (Twitter: https://twitter.com/RogerWLawson )
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