Pubs boss tirade
Wetherspoon boss Martin turns fire on City regulators
Tim Martin: system is ‘up the spout’
Tim Martin, chairman of pubs chain J D Wetherspoon has called for an overhaul of the corporate governance code which he blames for a number of company failures.
in a tirade against the regulators and advisers, he said: “There can be little doubt that the current system has directly led to the failure or chronic underperformance of many businesses, including banks, supermarkets, and pubs.”
In a statement alongside a trading update, he went on: “It has also led to the creation of long and almost unreadable annual reports, full of jargon, clichés and platitudes – which confuse more than they enlighten.
“I believe by vesting so much power in non-executive directors, the system is also disenfranchising executives and the workforce – the people who have real expertise and are the cornerstone of business success.
“A core problem is that CG i[corporate code] institutionalises short-termism, inexperience and navel-gazing.
“‘Independent’ non-executive directors (NEDS), who work part time, are limited by the code to nine years’ service and stay, on average, for just over four years
Pubs showed a rise in sales
“It is also common practise for there to be only two executive directors, the most senior of whom, the CEO, averages only about five years’ – managements and workers are thus absurdly underrepresented.
“Compliance with CG guidelines increases the risk of failure – companies like Northern Rock, HBOS, Carillion, Thomas Cook and Mothercare were compliant with the code, but had shockingly low levels of experience (around 4 years per director) and executive representation.
“A Noddy-in-Toyland aspect of the current farce, as indicated above, is that the ‘comply or explain’ principle, which underlies the code, is not observed, in practise, by many ‘enforcers’ – ie institutions or their corporate advisers.
“My view is the UK CG system is up the spout – and is itself a threat to listed companies – and therefore to the UK economy.
“No sensible business, looking to the long term and genuinely apprised of the reality of the CG system, would float on the London stock market today – who wants to guarantee eventual destruction, after all?”
The company said like for like sales for the 13 weeks to 27 October increased by 5.3% and total sales by 5.6%.
It has opened one new pub since the start of the financial year and has disposed of four. It intends to open between 10 and 15 pubs in the current financial year.
It has spent £43.3m on buying the freeholds of pubs of which it was previously the tenant and has bought back £6.4m of the company’s shares.