The business - Patrick Hosking sheds no tears for Michael Green

Carlton's Michael Green deserved to be ditched. Not because he made bad TV, but because he was a bad

Shed no tears for Michael Green. Ignore the nonsense being peddled by his friends that he was unfairly ambushed by nasty, anonymous City suits. Scoff at the canard that an innocent businessman has been toppled by powerful interests accountable to no one. Blow a raspberry at the claim that shareholders are meddling in things that are none of their business.

For non-luvvies among NS readers, it should be explained that Green, chairman of the media group Carlton Communications, was humiliated the other day when Carlton and its putative merger partner Granada announced that he would not, after all, be given the chairmanship of the combined group, to be called ITV plc. The U-turn was the result of a spectacular coup orchestrated by Fidelity International's fund manager Anthony Bolton. He rallied support from some of the biggest institutional investors in the City, including Legal & General, Schroders and Norwich Union. There have been similar revolts before. But never has the ultimatum been so brutal, nor the line of heavyweight investors queuing up to wield the knife so lengthy. The affair had added piquancy because the rest of the Carlton board, led by the former banker Sir Brian Pitman, snubbed the investors and stood by their man, only to change their minds 36 hours later.

The story is not yet over. As I write, there have been no departures from the Carlton board, but several directors must be itching to resign in disgust. The whole merger could even be jeopardised.

There were many good reasons for ditching Green. There are serious doubts that he could work harmoniously with his bitter enemy Charles Allen, the chief executive-elect. A chief executive in all but name, Green's elevation to chairman of the new company would also have breached boardroom rules.

But the clincher is that, in recent years, Green has simply been a bad businessman. I don't mean bad for TV programme quality or bad as a man manager, though both accusations could fairly be levelled at him. I mean he has been bad at the whole point of capitalism - making money for his shareholders. This has been true not just over the past three years, which have been tough for everyone, but over the long term. An investment of £1,000 in Carlton shares 15 years ago, with all dividends reinvested, will have grown to just £1,046 today.

The lowliest savings account would have been more fruitful. The average stock-market investment has much more than doubled over the same period, even before reinvesting dividends, as has the average media share. Despite owning the lucrative weekday ITV franchise for London during a period of unparalleled prosperity for the capital, despite being allowed to merge with other ITV franchises (mini-monopolies every one), despite having an enviably entrenched position in a fast-growing industry, Carlton has failed.

You, I and anyone with a pension scheme, endowment policy or stock-market ISA are poorer as a result. Green (base pay £707,000) has to accept responsibility for that. That he should be rewarded with the prize of chairing the merged ITV should have been unthinkable from the start. It is rubbish to say that unaccountable institutions are meddling in what does not concern them. They were interfering not in the minutiae of the business, but in the choice of the most powerful force in the boardroom. Surely the owners of a business should have a say in who runs it.

It is true that institutional investors are shamefully divorced from the ordinary savers whose funds they oversee. But they are at least starting to intervene on their behalf when it would be easier to do nothing. Institutional investors used to fear any public confrontation with company directors lest it should jeopardise the valuable pension fund mandates in their gift. That they are cautiously sticking their heads above the parapet at all is very good news.

Perhaps all the flak fired at non-executive company directors has influenced Sir Edward George in his choice of retirement jobs. Given his credentials, the former governor of the Bank of England could have had virtually any post. Within weeks of his three-month purdah ending last month, he has accepted three part-time offers, which will pay him in the region of £250,000 per year.

Curiously, however, none is with a conventional listed UK blue chip. His new employers are the merchant bank N M Rothschild, the Duke of Westminster's property company Grosvenor Group (both privately owned and unlisted) and Nestle (Swiss). The strictly limited disclosure rules that apply to unlisted companies and Swiss ones, and the long distance to Vevey, should ensure Steady Eddie has a nice quiet time of it, without much bother from the British financial press.

Patrick Hosking is deputy City editor of the London Evening Standard

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