An encouraging aspect of the sudden departure of Paul Marchant from fast-growing, ‘no-frills’ fashion group Primark is the robust response of parent group ABF’s chief executive George Weston.
Diversity, Equality and Inclusion (DEI) rules may have been weakened since Donald Trump’s return to the White House.
But there can be no excuses for bosses abusing the power of their leadership positions for inappropriate behaviour towards colleagues.
Unfortunately, retail, business and the financial community have developed a reputation for such incidents.
The employers’ group the CBI has been sullied by such charges. In the fashion arena, Ted Baker was brought low by the antics of its founder Ray Kelvin.
Out: Minority investors in ABF might question the lack of transparency over Paul Marchant’s severance agreement
Harrods only now is coming to terms with the appalling behaviour of the late Mohamed Al Fayed.
As for the financial community, the BBC series Industry offers crude insights into abusive practice in investment banking.
In the real-world, Crispin Odey recently was fined £1.8million by the Financial Conduct Authority (FCA) for seeking to frustrate investigations into sexual misconduct.
Former Barclays boss Jes Staley is seeking to overturn claims he misled regulators over his relationship to disgraced financier Jeffrey Epstein at the FCA’s Upper Tribunal.
As head of a family dynasty which controls some 58 per cent of ABF shares, Weston was in a strong position to deal with Marchant’s transgression summarily.
Weston is clear that ‘high standards of integrity are essential’. However, the inquiry by City lawyers Herbert Smith Freehills into the incident, which precipitated Marchant’s departure, leaves unanswered questions.
As chief executive for 16 years, there must be worries at ABF that further allegations will emerge now the lid has been lifted.
Indeed, it turns out there was at least one previous complaint about an unsuitable communication.
There is much we still don’t know. When Bernard Looney was removed as chief executive of BP, after misleading the board about his personal life, he paid a heavy price, forfeiting £32.4million of potential pay and bonuses.
As a subsidiary, Primark is not obliged to disclose Marchant’s pay or the cost of his severance.
Minority investors in ABF might question the lack of transparency over the severance agreement for an executive responsible for building Primark’s operating profits from £250million to more than £1billion. It is hard to justify privacy given the circumstances.
Weston and colleagues have yet to decide on the succession. ABF finance director Eoin Tonge takes interim control.
ABF has never been slow to look outside for the appropriate talent, with M&S executives a happy hunting ground.
What could be more rewarding than working in low taxation Dublin close to Guinness, great rugby and the finest bloodstock breeding and racing.
Tech titans
Absent from last week’s Spring Statement was any reference to research and development. If Britain is to become a defence, high-tech and life sciences superpower, the fastest route is to incentivise R&D.
Latest data from the Organisation for Economic Co-operation and Development shows that China is prioritising innovation. It increased spending by 8.7 per cent in 2023, against 1.7 per cent in the US and 1.6 per cent in the EU.
Start-up nation Israel is top of the league table spending 6.35 per cent of total output on R&D, followed by South Korea at 4.96 per cent with the US at 3.6 per cent.
Britain has fallen behind Germany and is at the OECD average with spend at 2.8 per cent of output.
The quality of the UK’s scientific research is symbolised by Nobel prizes for Cambridge and great companies such as Arm Holdings and DeepMind (both in overseas hands). The extra £400million on drone tech and AI for defence is encouraging but pitiful.
Using the tax system to boost R&D and turbo-charge growth and high-quality jobs ought to be a no-brainer.
Private grief
Thames Water consumers can breathe a sigh of relief!
Private equity barons KKR are galloping to the rescue with an offer to fill the £3billion black hole in its balance sheet.
More debt-fuelled help for a utility already brought to its knees by crass financial engineering.
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