The human factor

The human factor - When company leaders invite new members into their boardroom, saying they will welcome a fresh approach to running their business, they rarely mean it. The sentiment is generally no more sincere than was Tony Blair when he implored Fran

by PATIENCE WHEATCROFT, business and City editor of The Times
Last Updated: 31 Aug 2010

When company leaders invite new members into their boardroom, saying they will welcome a fresh approach to running their business, they rarely mean it. The sentiment is generally no more sincere than was Tony Blair when he implored Frank Field to think the unthinkable and then, when he did so, consigned him to the back benches.

So when Lord Hollick of Notting Hill went searching for a new chairman for United News & Media, the true job description probably amounted to one of minimal interference, a continuation of the pattern Hollick had established with his previous chairman. Lord Stevens of Ludgate was kept to the confines of his office almost from the day that Hollick's MAI took over United.

But Ronnie Hampel would not be chairman in name only. When he moved in at United he began to ask awkward questions. The man whose 40-year career at ICI culminated in the radical division of the business in two has had a swift and dramatic impact at United, initiating actions that have shattered Hollick's empire.

The result might not have been so drastic were it not for Hollick's arrogance and the Machiavellian skills of his opponents. At the start of the year he envisaged a future at the helm of a media empire like Rupert Murdoch's, but he has had to bow out of television completely. Worse still, he has handed victory in the struggle over UK television to his arch-rivals at Granada.

Sir Ronnie, conscious of United's ailing share price, had challenged Hollick on the strategic sense of being a bit-part player in television.

Hollick's response was not to bail out but to propose a merger with Carlton.

To onlookers, this seemed doomed from the start. On any logical interpretation of policy on TV ownership, the competition authorities should have declared it a step too far.

Even as they announced the deal, Hollick and Carlton's Michael Green made an uncomfortable pairing: one a french polisher's son whose formidable financial brain had helped him rise to a Labour peerage; the other from a moneyed North London crew, once married into the Wolfson clan, and a committed Tory. Their one shared attribute would not make power-sharing easy, for both are autocrats who cannot let go of the reins.

In the new combine, Green was to be chairman and Hollick chief executive, but gamblers in the City were soon laying bets on how long it would be before the pair came to blows, with the odds in favour of Hollick delivering the knock-out.

If they could have worked together, Green's vision and Hollick's financial acumen might have created a formidable double act. But they were pitched against one of the business world's most awesome twosomes: Sir Gerry Robinson and Charles Allen.

When Sir Ronnie argued the need for consolidation of ITV franchises, he had no prejudices about the outcome. For Green and Hollick, however, hostility towards Granada was so strong it may have clouded their judgment.

Beneath his relaxed smile Robinson is as tough and ambitious as the other two. Although a paid-up Labour luvvie, rewarded with the Arts Council chairmanship and a peerage, he and Hollick are far from friendly. Robinson's relationship with Green has been tested in the boardroom of On Digital, where they are pragmatic partners and the air turns blue with discord.

Robinson was already preparing Granada to benefit from changes due in the ITV ownership rules, demerging his group into its hospitality and media units. Green and Hollick were encouraged in their merger plan by the knowledge that it would thwart Robinson and stunt the career of Allen, the bachelor Scot who had stepped into the foreground as chairman of Granada Media. The plan could hardly have backfired more spectacularly.

Hollick was convinced that his deal would get regulatory approval (conspiracy theorists cite his political connections), but he overlooked the political impartiality of the Competition Commission.

Robinson and Allen, having recovered from their shock at the merger plans, gave notice that they might bid for either Carlton or United, doing all they could to win the Commission's support. While Hollick and Green largely left their lawyers to deal with the matter, the Granada pair were virtually giving the Commission members personal tours of the Coronation Street studios. The charm initiative may not have swayed the outcome but it probably did no harm.

The verdict that the merger could only proceed if United ditched its main Meridian TV franchise scuppered the deal and left Hollick with little option but to sell his TV interests to Granada. It could hardly have been more painful for him. But at least Sir Ronnie was there to offer encouragement.

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