I am in two minds about Sir Richard Sykes's fatuous suggestion the other day that private shareholders should be banned from companies' annual general meetings.
The former chairman of the drugs group GlaxoSmithKline was wrong for many reasons. Excluding small shareholders would tilt the playing field even more in favour of the big institutional battalions and make company managements even less publicly accountable than they are already. It would stamp out the palpable hits that the smallest and most naive shareholder can still occasionally score against the big corporate machine. And it would prevent companies ever being quizzed publicly about issues that are rarely raised by institutional investors, such as the environment and the treatment of suppliers.
But Sir Richard, who is now Rector of Imperial College, London, at least stirred up some publicity for the inquiry into 21st-century investment which he is chairing under the auspices of the Tomorrow's Company think-tank. He also inadvertently highlighted one of the great problems with modern-day capitalism - the amazingly patronising attitude of company managers and their apparatchiks towards the people who ultimately pay their salaries.
After 22 years in financial journalism I have probably sat through even more agonising AGMs than Sir Richard. I agree that many of the questions from small investors are ignorant and time-wasting. But much of the ignorance is down to the companies themselves. Annual reports and other company statements are usually a porridge of jargon, company-speak and deliberate obfuscation. How many companies bother to explain in plain English what it is they actually do? Drug companies - Sir Richard's old industry - are particularly guilty. I've yet to see a single drug progress report that tries to reach the intelligent lay person.
Again, if debate at most AGMs is pathetic, it is mainly because company directors do all they can to stifle discussion. Questions about strategy or important company moves are plonkingly put down: "We know best. Period." That is the message from the aloof height of the podium, while the shareholder in the shadows down below finds his microphone has been switched off.
Two things these days stop capitalism working better. First, company directors are unaccountable and greedy, and their rewards are determined by short-term goals. Second, there are too many intermediaries taking too large a cut - from actuaries and stockbrokers to fund managers and lawyers.
And that's why Sir Richard's 15-strong panel of experts is unlikely to come to the right conclusions. It is packed with - you've guessed it - company directors and intermediaries. Not one member is purely on the side of the poor old saver.
Matt Barrett, chief executive of Barclays Bank, has had a rough ride from the media (including me). If it's not branch closures, it's his £1.9m pay cheque, or the appearance on the internet of his wife (now his ex-wife) in nothing but a fur bikini.
But you have to applaud his courage in: a) publicly setting himself measurable targets and b) continuing to publish the results even when he misses them. At the end of 1999 he set himself the task of turning £100 of shareholders' money into £200 over four years. Now, he admits in the annual results, he has turned £100 into, er, £96.
Full marks for honesty. Most companies do not set themselves such specific targets and would certainly not continue to publicise the results when they don't go according to plan.
Gold stars, too, to the MPs on the Treasury select committee, who have just published their scathing report into the split capital investment trust scandal. Conclusions: consumers were misled, the industry was reckless, it was sometimes little more than pyramid selling, and a "magic circle" of City folk colluded to rip off the public.
Apologists for the guilty parties sniffily accuse grandstanding MPs of making accusations behind the protective wall of parliamentary privilege. Some backbenchers did not even properly understand these complex products, it has been pompously asserted. How on earth could they? Even the experts didn't understand them, it turned out.
The workings of the select committee may have been rough justice. But sometimes that is preferable to the silence and tortoise-like progress of the Financial Services Authority. Many pensioners who invested in "splits" will die before they receive either compensation or apology, but at least they have the consolation of seeing those responsible shamed.
Patrick Hosking is deputy City editor of the London Evening Standard
