Opinion: Speak up or fall prey to the regulators

Poor Sir Rod Eddington. Just when he was about to board the plane back to Australia with his 'job done' certificate from British Airways, a major summer dispute threatens to tarnish his legacy.

He leaves a company no longer in danger of going bust, but one where staff working practices are still Byzantine. Nevertheless, Sir Rod's accessibility and communication skills cannot be faulted. As the head of a public company, he has long recognised the need to be transparent and accountable to a broad range of people - shareholders, customers, staff, suppliers and media.

The contrast with Texas Pacific Group - the private equity firm behind Gate Gourmet and the other main player in this August drama - could not be starker. It has made it clear that it has no interest in talking to the media.

A few years ago, when private equity was a minority sport, that would have been understandable. But it is now mainstream. That makes groups such as TPG, KKR, and Apax centre stage in the financial community. And yet they provide financial information to no-one but their own investors.

It is a similar story with the hedge fund community, now responsible for more than half of all the share trading on the London stock market, and the first call each day for the likes of Goldman Sachs and Morgan Stanley. In many ways this march of private capital is to be welcomed.

It brings efficiency gains, helps improve the workings of capital markets and poses a welcome threat to plcs, which have a tendency to get fat and lazy if given half the chance.

So we meddle with their freedom at our peril. Nevertheless, the disadvantages plcs now face force the issue to be raised. At a recent lunch I hosted for chief executives, one told of how his company's board meetings were now dominated by Higgs-compliance issues. Business performance had been relegated to AOB. He was only half-joking.

It can't be long until regulators and even the Government start to notice the unfair balance here - not least between Sir Rod's willingness to explain, and TPG's mistaken secrecy about its mistakes.

Two things need to happen. Regulators should make a plc corporate governance bonfire and stack it high. And private equity and hedge funds should get smart and show that they at least know how to spell the words accountability and transparency. Otherwise they may find the dead hand of regulation on their shoulders.

- Kate Nicholas is away.

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