Bill Gleeson; Directors need to look at their own ambitions

Nov 21 2007 by Bill Gleeson, Liverpool Daily Post

HOW does the trading arm of a charity lose £150,000? That’s what happened to Weston Spirit Trading, the Liverpool-based trading arm of the youth work charity established by Falklands War veteran Simon Weston.

Unlike many charities, WST didn’t run a chain of shops. Instead, it offered business advice and training services. The problem was it became too difficult to make a worthwhile margin, which is an excuse for breaking even but not for making a big loss.

The likely explanation for WST’s very poor performance is that its cost base was too high.

The liquidator to the charity described to me the look of surprise on the faces of some of the directors when presented with the facts about WST’s performance. How can that be? How can a director claim to be surprised about the fundamental trading position of their business? There was no suggestion they were being duped with false figures; they simply took their eye off the ball.

The same liquidator offered some sympathy for the directors, suggesting they do charitable work in their spare time because they want to help. I would wonder, however, whether that is always the full story. I don’t know about the people involved in this case, but my guess is some take on directorships of good causes and other bodies because it does their CV good, or maybe offers them the opportunity to make connections that may not otherwise be open to them. In other words, people can do these things for the wrong reasons, and as a result they take their eyes off the ball.

It was the same with Liverpool Culture Company. The Culture Company had 16 directors until the Mathew Street debacle. Most of them didn’t see the catastrophe coming. But I don’t see how you can sit on the board of any organisation and fail to understand the big issues affecting it. If you are a member of a board, it is your job to ask the question and get the answers. How else can you exercise oversight?

THE world is full of spin doctors and Merseyside is no exception.

In their desperation to promote the reputations of their employer or client, spin doctors will oftentimes try to overspin or even mislead.

Statistics is a particular gold mine for them.

The latest example was a press release from Liverpool City Council that claimed that business start-up rates in Liverpool were second only to Bristol’s. The claim was inspired by a desire to show that all of those policy initiatives designed to improve local enterprise are bearing fruit.

But, on closer inspection, it turns out that Liverpool is second in a limited list of cities, which, with the exception of Bristol, have a worse experience than Liverpool. When you compare Liverpool’s performance to the whole of the country, you find it is below average.

Isn’t that a bit like saying Derby County would be top of the Premier League if the other 19 teams weren’t there? What would be the point of that? Why can’t the council cope with the truth that British regional cities are doing badly and entrepreneurs prefer to set up outside them. Isn’t grasping the facts likely to be the only way we can address the real issue and then come up with a good solution?

Nor is it the first time we have seen this. In the past, The Mersey Partnership has come up with dodgy-looking top spin on statistics.

Sadly, I’m sure it’s their experience that some journalists will cut and paste their press releases and stick their bylines on top of it and call that journalistic endeavour. But that won’t happen here.

It’s time to wise up, guys, and stop trying to pull the wool. After all, who do you think you are kidding?