SmithKline Beecham FD Hugh Collum delivered the closing address of the ICAEW’s FD conference with a nautical theme.
In a talk entitled Rearranging the deckchairs on the Titanic? Managing global companies in turbulent markets he warned that businesses face tough times as global markets become increasingly volatile and liable to financial shocks.
But the correct course of action is not to rush for the lifeboats as the world economy encounters difficulty. “Concentrate on your strategic objectives,” he said, “and don’t be distracted from where you really want to go by ‘stimulating’ events around you.” A slower and steadier speed is the correct remedy.
“Some people have fallen for the idea that it’s doom all around us, when really it’s just gloom,” Collum said. The Asian economies, he thinks, will bounce back more quickly than expected, and we should remember that the world economy has been here before and survived, most recently with the Latin American debt crisis. Talking up the admittedly bad situation is also foolish.
While the speculators and hedge funds are in deep trouble, companies have to stay focused on risk management. Collum even found time to joke about SKB’s failed merger with Glaxo Wellcome. “Big deals are like riding elephants,” he quipped. “It’s jolly hard work getting on, and it takes time and effort … oh, and falling off can be painful, too.”
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