Update 18Aug2014: Well it now looks as though the government is finally catching on to the problems relating to the legislation in this area which has left UK Companies House with no investigatory power in these matters and having to accept all registrations in good faith without verification as long as they are completed correctly. What is also interesting about the government’s plans for an ‘integrity registry’ which “will crack down on rogue directors” is the global coverage that
it has received. One of the most concise news stories is found in the Daily
Times in Pakistan here. I wonder why this is?  

Posted 17Jan2013
The Economist Intelligence Unit reports that draft legislation presented to the Panel on Financial Affairs of the Legislative Council (Legco, Hong Kong's parliament) on January 7th threatens to withhold information identifying company directors (see here). This is at a time when democracy protesters in Hong Kong  are calling for the Beijing-backed leader of the Special Administrative Region (and the man initiating the legislation) to resign (here). An interesting aspect of these demonstrations is the presence of the Hong Kong Colonial Flag (see photo left) that used to fly over Government House when the UK ruled the territory up until 1997. There is much discussion in Hong Kong about what the flag symbolises today (here) but the flag is clearly associated with the British institutions that used to run the territory. Even though the colonial form of administration was not 'democratic' as we would define it in terms of representative democracy, British rule was generally seen as being pretty efficient, reasonably transparent with low level corruption. Since 1997, Hong Kong has prospered greatly partly because of the strength of the rule of law - particularly in relation to commercial transactions - that Britain left behind. 

Unfortunately however, Hong Kong democracy activists opposing the draft legislation presented to the Panel on Financial Affairs would find it more difficult today to use UK Companies House as an example of how a world class institution should deal with information identifying company directors  (see here my take on why Companies House is world class). Since the 1997 Hong Kong handover, the transparency of the public records held at Companies House has taken a step backwards.

For example, the Companies Act 2006 makes the activities of UK company directors less transparent. It makes the open source, public record, information available from Companies House less useful to those checking to see who controls limited liability companies.  It devalues Companies House both as the registrar of UK companies and also as a world class example to those who oppose restricted transparency draft legislation such as that proposed in Hong Kong. 

The UK Companies Act now allows UK company directors to use a 'Service Address', keeping their residential address private. So now not only do directors get the benefits of trading with limited liability but also get to hide behind a 'service address'. Consequently, instead of the general public being able to find out where a director behind a company really lives, only credit reference agencies and "specified public bodies for carrying out their public functions" get to apply to see this information.

This may sound reasonable but one of the main reasons why people decide to form a limited company is the benefit of having limited liability. This means that directors' personal property is legally separate from the company's assets, as the company is a separate legal entity. In the event that the company was unable to pay its debts, directors' personal property would not usually be at risk. When operating as a sole trader however, individuals have unlimited liability and risk losing personal assets, such as homes, cars and other property if things go wrong. There have long been discussions about whether this form of limited liability protection encourages people to take undue risks without the corresponding levels of responsibility. But overall, the limited liability company, is arguably one of the greatest innovations (along with property rights) driving different forms of the 'free market' system that generates global human prosperity.

Unfortunately, as a reaction to the animal rights activists who harassed directors of UK companies carrying out scientific research in the mid-noughties, the legislation on director service addresses is a retrograde step - a protection too far for those also benefiting from the protection of limited liability. Directors under this sort of hate-fueled scrutiny could already seek a confidentiality order that their address should not be available for public inspection. Quite rightly, such a confidentiality order would only be given in limited circumstances. The director or secretary would have to satisfy the Secretary of State that the public availability of their address was likely to create a serious risk that they, or a person(s) who lived with them, would be subjected to violence or intimidation. This is entirely reasonable.

Now the same companies marketing service registered office addresses for companies are offering the same service for ALL directors addresses... this means that the only public addresses potential suppliers and customers may see when checking out a company maybe the same address for everything associated with the company. In fact, as a result of these changes, it is possible that EVERY company and EVERY director in the UK could end up being registered at the same service address! 

An edition of the BBC's radio programme 'You and Yours' highlighted the problem of company service addresses, where several companies using 145-157 St John Street, London as a registered office address were found to be 'Boiler Room' frauds. This is the home of a 'serviced address' company called Companies Made Simple that is now actively encouraging UK directors to use (for a fee of course) the St. John Street address as their own for the purposes of their directorships. Ludicrous!

In response to this, I may have once suggested that if you don't like these changes in the UK you can always take your business to free market Hong Kong - but it looks like this bad practice is spreading! 

Am I Talking Balls (See the TOB Rule 6)? If so, Talk some Balls (see the TOB Rule. 5) of your own by clicking on the comments tab below.

Wed, 16 Jan 2013. It's amazing to me how we judge events of the past by the standards of our own time. Of course, some events, for example the Holocaust, should be judged the same no matter from which historic point you view it. But what about the cultural mores of office life at a point in time with respect to Sexism? Chauvinism? Discrimination?  How different are these things judged even in our lifetimes?

Two events have caused me to write about this.  First, the scenes shown in some old photos that I found recently in the basement of my last days in a 1980s office environment before joining the army. The prints were going moldy and I just about saved them through digitisation. They portray scenes of rude gestures and nudity so please don't click on the link above if you are easily offended. Second, and I never thought I would ever write these words in a million years: the points raised in a recent article in the Daily Mail (yes I read everything!) by TV presenter Esther Rantzen  ("Esther blasts Savile police squad over its star arrests: Focus on famous could jeopardise young victims seeking justice, says ChildLine founder").  

Now Esther Rantzen is a woman who I know most as wanting to be the MP for Luton of all places! (If you understand that I am from Watford and comprehend the rivalry between Watford and Luton - you'll get a feeling of my opinion of her!).  In any case, Esther's Daily Mail article, criticises the UK Metropolitan police task force's Operation Yewtree, which was set up to examine claims of widespread child abuse in the wake of the Jimmy Savile revelations, yet has now started to arrest celebrities for ‘historic’ allegations of sexual abuse brought by women who were in their twenties at the time.

I know nothing of these allegations other than what has been made public and make no judgment whatsoever on the merit of them. However, is it now time for the hardworking detectives of Operation Yewtree to revisit the culture of the workplace in the 1970s and 80s and put things into context of that time? For them to experience a kind of "Life on a Work Place Mars". What they may find is that the type of things that were thought 'funny' then may not be thought so funny now. In fact, what happened in offices just a few years ago may get you arrested today! 

A slideshow of a particular workplace experience of mine when I was a consultant with Arthur Andersen (now known as Accenture - see The TOB Rule 8 for more on this) which took place in the office of one of Britain's biggest companies in the 1980s might just be the sort of Martian experience that they need. So officers, click on this link here to visit another planet...and, please remember, you have been warned!

For many years, I have been attending two dinners annually with a group of men who I have known and greatly respected most of my adult life. We started politicking together in the early days of Mrs T (see our 'busy frisson’ here) when the fight was on for the soul of the Conservative Party between the 'statists' of Edward Health and the 'free marketers' of Keith Joseph.  We put ourselves forward as candidates for posts in the Young Conservative movement and some of us went onto serve on councils and stand for the UK parliament (See the TOB Rule 5) later in life. 

These dinners have always been events to look forward to. It is a time when we leave our wives/partners elsewhere and have a good chin-wag about the state of the world and how, if we were in charge, we would make the world a better place (and believe me the group has all the quality skills and experience required for running a modern country and/or global company).  My favourite one of the two dinners is held later in the autumn when we get a good deal at a country house hotel and stay Friday overnight (the spring dinner is usually a simple upmarket London affair).  The conversation and debate continue into breakfast the next day and we are normally joined by those attendees who have moved overseas or have to travel long distances, which makes the whole event a more compelling 'catch up' (want to know what it's like to live an expat life in Mauritius - I now know!). At some recent dinners we have even had some interesting foreign guests join us to broaden our outlook still further (it's amazing how language barriers fade away after a few bottles of wine!).

As we start 2013, things are not all well however. The state of the country and the Conservative Party under the leadership of David Cameron and George Osborne is stressing relationships among my dinner companions.  At the last dinner, the arguments of The United Kingdom Independence Party (UKIP) were put under the microscope both during dinner and afterwards. One attendee for example, had researched the UKIP policies on small business, which I like many others at the table found to be surprisingly appealing and well thought through.  Unfortunately, to others all such discussion about a rival party to the Tories was 'treachery'.  Round robin emails (BTW Guys, I hate this form of communication) during the first week of December exchanging points and counter-points on the intricacies of the UKIP platform made things worse and my friends seemed to exhibit passions that I had not seen in them for quite some time!  

Then on 10 December came the bombshell that one of our number had 'defected' to UKIP. "Mark Hughes a former leader of North Hertfordshire District Council, who was Mayor of Royston in 1990/91, has joined UKIP..." read the web posting of a local paper (see Former Tory town mayor joins UKIP) and my dinner companions were off and running again with those damn emails!  

Now, I know Mark as one of the most successful Independent Financial Advisers in the UK and someone whose economic and financial expertise should be incorporated into Treasury thinking (is there still such a thing?). I also know that he is not a man to do things without all due consideration and whilst not a shock to me, I understand that this was a big step for him. As well as his previous role in the local Conservative Party, Mark has also stood twice for the Party in parliamentary elections.  Such commitment takes time and money so this was not the action of someone who is merely 'playing' politics. I will leave you to follow Mark on Twitter to hear of his most recent views on UKIP (follow Mark here on Twitter) but if people like Mark (monied, knowledgeable, energetic and passionate) are leaving the Conservative party, then they have much to worry about. So far, all the Prime Minister seems to be doing is insulting his potential UKIP supporters (here). Causing me even more disappointment is the once 'sound' Chairman of the Party, Grant Shapps, who seems to have backed himself and the Party into a corner on this issue (here).

It will be interesting to see how this all plays out both for my dinner friends and the Conservative Party as we run into the 2015 election. At present I am sticking with my local Conservative member of parliament (Richard Harrington MP) as in all my years in politics I have never known a better constituency MP who seems to broadly support a centre right, free market, agenda.  But there are some big issues coming up before the election which he must be on the right side of to continue to receive my vote in this 3-way marginal seat (a clear cut referendum on Europe being one of them!).  So even if no one else is, I will be watching this space!

The next dinner is scheduled for late April. If Ballsy Thinking (and compromise!) has ever been required, I fear it will be at this event. A subsequent blog piece will record generic developments for prosperity. 

Are you thinking of switching, or have you switched, to UKIP from the Conservative Party?  What advice can you give me for helping to get all my dinner companions back around the table (and, sorry since we are not in the officers mess NOT talking politics is NOT an option!)? Click on the comments link below and start typing...