Railtrack, it seems, cannot make headlines for any of the right reasons. The beleaguered company now finds itself in hot water for its, so far, unsuccessful attempts to find a new chairman.
Newspapers announced the company is having to look overseas for a new chairman. Apparently no one from this country is willing to move into one of the hottest seats in UK plc. National derision, the possibility of creeping nationalisation and potential manslaughter charges make this job as saleable as British meat in the rest of Europe.
But aside from the travails of Railtrack, the move to look overseas was significant for other reasons. As business markets become more international in nature then there is no reason why companies such as Railtrack should limit their search for top people to just these shores.
‘Many traditional British institutions have realised you have to look abroad to get the person you need,’ says Richard Taylor, an Institute of Directors spokesman. ‘I don’t think it should be interpreted in any other way.’
Railtrack is not alone in looking overseas. British Airways, Marks & Spencer, Pearson and Barclays have turned abroad to find suitably senior executives.
The hiring of foreign managers is less contentious with each passing appointment. Some British managers have also proved a success in the US, though the trend is less pronounced throughout Europe.
But a combination of factors – corporate, social and political – may make the job of CEO, and other high-profile posts including the position of FD, increasingly less attractive.
These include longer hours, a shorter lifespan as the head of a company, and ever-increasing scrutiny from shareholders, the public and the government.
‘If you are 55 (and offered a job as a CEO) you probably don’t need the job or the hassle,’ says Murray Steele, head of strategic management at the Cranfield School of Management. ‘It is becoming a harder and harder job.’
As the Railtrack board was casting its net far and wide, Jean Garnier chief executive of GlaxoSmithKline, the world’s second largest pharmaceutical, was being berated by protestors over his company’s policies.
In Cambridgeshire, the government was showing its support for the bosses of the controversial company Huntingdon Life Sciences whose chief executive Brian Cass was attacked by three masked baseball bat-wielding assailants near his home in February.
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Outside protestors vowed to continue their opposition to Huntingdon until it closes.
‘Railtrack is one job that has got every conceivable negative angle to it,’ says Steele. ‘If you are a simple, intelligent human being, would you want to take it? Certainly not.’
Railtrack is as fraught as an executive position gets, so therefore it is an extreme case.
But Steele sees other factors at play that makes the top positions increasingly less attractive even for companies far less contentious than those mentioned.
The latest research shows senior bosses stay in their positions for an average of four years, a number that could decline in the future.
Scrutiny of senior roles is becoming more important as a reason why the top jobs may seem less attractive. This involves not only government legislation, but also from an increasingly interested public. ‘We are all a little more interested in business.’ The government’s drive to make business more accountable and transparent seems to be having some effect in this regard.
It is not only affecting those at the very top. FDs have found their role changing. ‘Finance directors have to stand up in front of directors and are going to be more scrutinised as well,’ says Steele. This will include taking a more proactive role in a company’s level of pension contributions or employee or executive pay.
One particular area where the scrutiny is becoming far more notable is through legislation, especially the proposals for a law on corporate manslaughter.
One of the reasons why the Railtrack position is thought to have been so hard to fill is that the prospect of a charge of corporate manslaughter for the Hatfield train crash will hang over the new incumbent.
Under current law, prosecutions for corporate manslaughter can be brought but are unlikely to identify just one individual, as current legislation has to establish that a company ‘through the controlling mind of one of its agents, commits an act which fulfils the prerequisites of the crime of manslaughter’.
Establishing who is the one person, the controlling agent culpable of manslaughter, would be proved difficult. So far only one case has been successfully pursued through the courts. Peter Kite was jailed for three years after the deaths of four schoolchildren on a canoeing trip in Lyme Regis, Dorset.
That case was easier to prove as Kite was a one-man company and therefore the ‘controlling mind’. New legislation will make more chief executives vulnerable to being pursued through the law courts.
And around 400 deaths occur each year in the British workplace, meaning that many could face possible prosecution. There are also fears that chief executives or directors do not have the proper insurance. Steele believes the introduction of such a law will help increase the pressure on chief executives.
‘There will be much more transparency, much more accountability,’ he says. The trend, says Steele, is for ever more scrutiny, and pressure, to be placed on company leaders.
How this will affect the recruitment market remains to be seen. Although many jobs will readily find recruits, there remains the fear that the most contentious and hazardous could prove a little more difficult to fill.
Taylor thinks the current problems should be seen in isolation. ‘I don’t think the job is becoming less attractive. People will always want to progress in their jobs. I don’t there will be any shortage,’ he says.