CAMPAIGNS: Judge and Jury: Earth the live wires at United Utilities before they catch fire - United Utilities needs to put fat cat scandals behind it and concentrate on winning back the confidence of shareholders, says Dennis Kelly, managing director of B

The press are enjoying the fallout at United Utilities. ’Fat cat executive ousted in bedroom coup’ headlines the Daily Telegraph after United Utilities chief executive Brian Staples was dismissed by chairman Sir Desmond Pitcher.

The press are enjoying the fallout at United Utilities. ’Fat cat

executive ousted in bedroom coup’ headlines the Daily Telegraph after

United Utilities chief executive Brian Staples was dismissed by chairman

Sir Desmond Pitcher.



And then comes the money. City editors are speculating on the pounds

600,000 departure package for Brian Staples coupled with share options

worth pounds 1 million. United Utilities denies that Staples’ departure

is due to anything except ’boardroom tension’. But whatever the reasons,

this is all looking like fat cat indulgence of the worst kind.



Sir Desmond can expect to face pressure from shareholders as well as the

media for the manner of Staples’ exit. His methods are portrayed as

autocratic and, after all, Staples is the second chief executive to go

within five years.



At the recent AGM in Manchester an irate ’small’ shareholder called for

Sir Desmond to resign. This is unlikely to be the last of such

calls.



Sir Desmond has created a major multi-utility group from a

middle-ranking water company. United should be well placed to benefit

from further deregulation in both water and electricity. But instead of

opportunity we see dissent and uncertainty. Sir Desmond risks drawing

public criticism not just of his company’s performance but for ’fat cat’

utility bosses in general.



There is no doubt that Staples’ departure comes at an awkward time for

the company. The Government has announced a windfall tax on the

privatised utilities which will cost United over pounds 400 million. The

water and electricity businesses also face regulatory change and

competition in their domestic markets. Additionally there is the debate

on the company’s involvement in international projects.



There is plenty to do. United Utilities will need to clarify and explain

its position on a range of major issues.So it doesn’t need to give the

headline writers an easy target. This is not the time to return to fat

cattery. This is the time for clear communication on serious core

business matters. United Utilities needs the confidence and support of

key audiences - its millions of customers, a dedicated workforce - and

of course the vital institutional and small shareholders.



United Utilities is a successful company with a track record of

innovation.



Let’s put the dirty linen away and get back to the real story.



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