Drugs or shops for Gent

IT MUST BE great fun being one of the new corporate crusaders, a shareholder activist, one of the Guardian Angels prowling the stock markets, seeking out examples of excess.

You can flex your muscles, Citizen Smith-style, spout forth to anyone who will listen, jump up and down at investors' meetings, have the say of life and death over the boardroom or even, as was evident at the weekend, over an Editor's chair.

Trouble is, it's all very well being macho and huffing and puffing, but without an end game in sight you might as well shut up now. Look at Marks & Spencer. You demand the head of Luc Vandevelde for not devoting enough time to the company. Fair do's. But then you make it obvious that you haven't got a clue who to put in his place. So where does that leave M&S? Rudderless.

And where does that leave your investments and those of your fellow shareholders - the ones whose cause you decided to fight (without consulting them first but what the hell)? Don't answer.

Studying much of the chaos raging on the directors' floors of some our biggest companies, much of it due to this newfound Boy Power, I can't help wondering what really goes on behind closed doors at our investment institutions. It beggars belief that they run their own businesses in such a haphazard, half-cock way.

Apparently, some members of the M&S board would like Sir Christopher Gent to succeed Vandevelde. It seems more likely that Gent will take over from Sir Christopher Hogg at GlaxoSmithKline.

Meanwhile, Sainsbury's continues its increasingly sad quest for a chairman and there are FTSE chairs and directorships empty or soon to fall vacant elsewhere.

Part of the reason is Higgs - bless him. When Sir Derek Higgs set off with his scythe through the undergrowth of British corporate life, few realised the destruction he would wreak. He didn't just stop at the weeds, he took the plants as well, recommending that no person could head more than one FTSE 100 firm.

No scope for the unknown

HIGGS' endeavour, commendable as it is, only served to highlight something that has been long suspected: the paucity of talent at the top of British business. We now know why Lord Marshall of Knightsbridge held so many chairs and why Allan Leighton continues to do so. (Leighton doesn't fall foul of Higgs - the organisations he runs aren't in the Footsie). Simply, there is nobody else.

This isn't strictly true - it's what the suddenly omnipotent fund managers would have us believe. In their limited, unimaginative gaze, there's no scope for choosing a relative unknown or promoting from within.

The Candidate has to be someone they've rubbed shoulders with and shared a few gins with, or a day or two's shooting. He has to have managed a large corporation and, preferably, has to be a Sir. Those with qualifications like commitment, energy and a track record of flair in the industry concerned need not apply. As for vision for how the company can be taken forward or a plan even, they don't seem to count either.

Take Gent. On the one hand, he is being lined up to take charge at M&S; on the other, he's the next chairman of GlaxoSmithKline. One suit fits all in British management, obviously. In Gent's case, his favoured cloth is a chalk pinstripe, set off with the sort of white-collared and cuffed shirt that not even M&S sells any more, and braces.

Memories are short in the City. It's only two years ago that the knives were first unsheathed for Gent. Until then, he'd enjoyed a brilliant career, propelling Vodafone from next to nothing to global giant, launching deal after deal without, seemingly, pausing for breath.

Whirlwind speed

HIS chutzpah - some might say arrogance - was legendary. He conducted negotiations for the £101bn takeover of Mannesmann from a box at a cricket match, treated those who dared to question his strategy and the amount he was paying (and being paid) with disdain, and trampled everything before him. His approach to Vodafone was not unlike the way some people play Risk, that old board game of world domination.

Some prefer stealth, using diplomacy and snapping up countries here and there unnoticed; others brook no opposition and go all-out for conquest. Gent's method was the latter, building market share at whirlwind speed, achieving enormous scale and presence.

In four years, he took Vodafone from Brit operator with 4m customers to international colossus with 93m. He had his fans, and the plaudits were deserved. But there were critics, too. The prices he paid to fuel his and the firm's ambition now look crazy. To be fair, it was a mad time - but £101bn? His favourite method of payment was to use Vodafone paper. Investors saw their shares soar from 50p to 400p. Yesterday, they were at 135p.

It's all very well rushing headlong to be number one, but number one in what? It's hard to see how the belief in continued growth that Gent instilled in his followers is going to be justified.

Not that Vodafone's future should concern him unduly. He left the company in July 2003. By then, the pace of his express train had declined. The wheels hadn't exactly come off but a loss of £16.2bn after tax for the year to March 2002 and a row with some shareholders about his pay (he got a £10m bonus for buying Mannesmann and his last package included £1.2m salary plus shares and bonuses worth £5.4m and nine million share options) upset his progress.

On the offensive

HE is no slouch at speaking his mind and, having been chairman of the Young Conservatives, he has toyed with the notion of a second career in politics. Criticised over his pay, he went on the offensive, lambasting as 'excessive' the proposed remuneration of GlaxoSmithKline chief executive Jean-Pierre Garnier, who was then making headlines and arousing passions.

Gent's reward for transforming Vodafone, and presumably for being so critical of Glaxo's salary structure, is to be offered the chair of the drugs company. In the correct and proper post-Higgs era, such a move looks clever. Likewise, if Gent pops up at M&S, plenty in the City would fawn over his appointment, relishing the fact the stores group had secured in City-speak a 'heavyweight', a 'known quantity', a 'good operator', a 'safe pair of hands'.

But appointing Gent could spark other tensions. He may have attacked Garnier's pay but he defended his own rewards with characteristic imperiousness, saying the snipers were motivated by 'envy, not aspiration'.

At Glaxo, the clash of egos with Garnier will be something to behold. At M&S, the fiery Gent, who did not go to university, would find himself cheerleader for the quiet Roger Holmes, who did and also went on to work for management consultants McKinsey.

Chalk and chalk in Garnier's case; chalk and cheese in Holmes's. It is hard to discern what benefits investors hope for from either appointment. Gent made his name from spectacular deals, not running the business. Of course, he did that as well - his first 12 years at Vodafone were spent managing the UK operation - but it was takeovers that gave him stellar status.

At Glaxo, he needs to galvanise the world's second-largest drugs outfit to come up with new best-selling products to replace the ones slipping down as patents expire. At M&S, the priority of the new chairman will not be the management of the different divisions but getting customers back.

The City thinks Gent is qualified to do both jobs. He can't - Higgs won't allow it - so he has to choose.

Glaxo would give him the world stage he has been used to, so it will probably be drugs not shops. There again, in Britain at least, being chairman of M&S has a special cachet. Get that right and he truly would be a hero.

As the headhunters - biggest winners to date from Higgs - ponder, they would do well to ask themselves a question. Who is the chairman of Tesco? The company is currently our most outstanding business by far, and its chairman is David Reid. David who? Yes, that one. He's been with Tesco since 1985. Nobody would suggest Gent should do his job. Or would they? After all, he looks like Superman to some.