Cream Doesn’t Always Rise to the Top

I’m not too taken with hype and bullshit; I had too much of it in my army days. Mind you, you could argue that, in its efforts to turn its recruits into a fighting unit, the army has to engage in some unusual activities. This, however, doesn’t really apply to the rest of us, so I’ll stay with my dislikes. I also don’t like not being told the truth even though I realise that, for many, that concept has an elastic quality. For me, this situation is at its worst when, not only do those lying know that they are lying but that they also know that you know that too; which brings me to my diatribe today.

Now governments have long worked on the concept that, to get wealthy people to work harder, you pay them more, whereas the opposite is true for those on lower incomes. In the more recent past, they and their cohorts in big business, have also justified paying exorbitant amounts to those at the top on the basis that that is the way to recruit the best and that, if these people didn’t receive the necessary salaries and bonuses, they would take their expertise overseas. Yet, at the same time, I don’t remember hearing too many of those other countries clamouring to have, for example, their economy nearly brought to its knees. Perhaps they had quite enough of their own people to do that.

So, when I wrote my first published book, “The Real Big Society”, I did some research and what I found was fairly commonsense. This was that most of the people in these positions didn’t necessarily move just for the money. In fact, like the rest of us, they took all sorts of factors into account. Advancement and the quality of life for them and their families being among these. Yet we still had, mainly, governments trotting out the mantras mentioned above. This, at a time when the rest of us were being told that austerity was the only answer and that we were all in it together. More mantras that were untrue. Demonstrably so with research showing that bosses of the FTSE 100 companies are now paid 130 times the average of their employees. In effect, that means that, in one year, these people receive what it would take their employees more than two working lifetimes to earn. In 1998, this ratio was 47 and, in 1980, between 13 and 44. Has the country benefitted to the same degree? I think that that would be hard to argue.

So I opened my newspaper on Sunday to read of a London School of Economics report that was described as “a damning indictment of the state of executive pay”. It seems that interviews with the top 10 international recruitment organisations, responsible for between 70% and 90% of CEO appointments in recent years, found a consensus among, what were called “corporate kingmakers” (no queens, you will note), that levels of remuneration for most senior executives were “absurdly high”. Crucially, these head-hunters went on to claim that, for every appointment of a CEO, another 100 people could have filled the role just as ably and that many chosen for those top jobs, were “mediocre”. Why am I not surprised?

What is really troubling about this that this occurs in a country where, according to Jesse Norman, MP, “There is a vast amount of untapped talent.” I know, I’ve spent much of my career in the voluntary working with people in that situation releasing, what one MP described as, “the extraordinary abilities of ordinary people”. If we did this, can you imagine the country that we might have?

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