The CEOs of Britain’s largest companies wield immense power, but we know very little about them. How did they get to the top? Why do they have so much power? Are they really worth that exorbitant salary?  Two academics from Queen’s Business school, Belfast, Michael Aldous and John Turner lift the veil on Britain’s corporate elite and provide the answers by telling the story of the British CEO over the past century. From gentleman amateurs to professional managers, entrepreneurs, frauds, and fat cats, they reveal the characters who have made it to the top of the corporate ladder, how they got their rise tells us about British society. They show how the quality of their leadership influences productivity, innovation, economic development and, ultimately, Britain’s place in the world. More recently, issues have arisen regarding high CEO pay, poor performance, and a lack of professionalism and diversity. Are there lessons from history for those who would seek to reform Britain’s flagging corporate economy?

The authors assert the economic power of CEOs makes them “important actors in society”, yet “despite their importance we know relatively little about the men and women who have formed Britain’s corporate elite”.

After assembling an historic database of British CEOs from Martin Sorrell and Lord Rosebery to Marjorie Scardino and Fred Goodwin. We learn of confident Victorian business pioneers, some aristocratic, others Glaswegian. Family businesses and their timeless struggles to identify succession. The impact of wartime government on industry is thoughtfully covered before we reach the post-second world war “managerial” world, when professionals – overwhelmingly accountants or engineers- take the reins with very patchy success and the corporate raiders of the 1980s. The alleged long-range failings of British management, with lacking new insights, a narrative of growing incompetence  and avarice is established, supported by an inevitably tendentious selection of individual leaders to chastise.

We have the post-privatisation salary rows (1985-95). People struggled to understand why civil servants turned CEOs received large pay increases as they were being required to take risk – some managed it others didn’t. Then there comes the disgraceful episode of the bank failures in the 2008 financial crisis- RBS, HBOS , Northern Rock.

The authors discuss the evolution of corporate governance from the 1992 Cadbury report on, as there are no effective checks on CEO behaviour. Trollope’s remark in Phineas Redux (1874) about the confusion between directors who know nothing and managers who know everything still describes some of today’s asymmetry of information.

Shareholder engagement with public company boards has worked less well, as investor seem largely uninterested in behaving as proper owns. The outsourcing of voting decisions to a box-ticking consultancy sector invented for this purpose is travesty.

The populous idea of capping CEO remuneration at a set multiple of average pay in the company. This would allow a pharmaceutical CEO to be paid three times as much as the CEO of a retailer, while unscrupulous CEOs of legend would surely redefine the low paid as contractors and shunt them off the books. Once a society’s indifference to the sources of its prosperity amounts almost to estrangement from them, it can hardly expect to be prosperous. 

The CEO: The Rise and Fall of Britain’s Captains of Industry by Michael Aldous & John D Turner, Cambridge University Press £25, 320 pages.