1991, Anger over British Gas chairman Robert Evan’s 66% pay rise.

  Happy Friday!

On this day, June 21, 1991, British Gas chairman Robert Evans faced intense criticism for accepting a substantial pay rise of 66%, catapulting his salary from £222,000 to £370,000. This event marked a pivotal moment in the ongoing debate about executive compensation and corporate governance in the United Kingdom. The controversy surrounding Robert Evans’ pay rise occurred against the backdrop of significant economic and political changes in Britain. British Gas had been privatised just five years earlier, in 1986, as part of Margaret Thatcher’s sweeping privatisation programme. This change from a state-owned enterprise to a publicly traded company was meant to increase efficiency and competitiveness. However, it also raised questions about accountability and the appropriate level of compensation for executives managing these newly privatised entities. Evans’ pay increase was particularly contentious given the economic climate of the early 1990s. The UK was experiencing a recession, with high unemployment rates and stagnant wages for many workers. Inflation was running at around 5.9% in 1991, making the 66% pay rise seem even more extravagant in comparison to the average worker’s experience. This disconnect between the executive’s compensation and the broader economic conditions risked creating the perception of a change management charade, a superficial performance of change without substance. The public outcry was immediate and intense. Trade unions, consumer groups, and politicians from across the political spectrum condemned the pay rise as excessive and insensitive. The Labour Party, then in opposition, used the incident to criticise the Conservative government’s privatisation policies and what they saw as a growing divide between executive pay and that of ordinary workers.

At the time, Labour’s energy spokesman, Frank Dobson, said, “It is a symptom of corporate greed. They think that now there are no restrictions on them, they can do what they like.” Change leaders must have contextual awareness, understand the broader economic, social, and political environment, and anticipate how decisions may be perceived in light of prevailing conditions. They prioritise clear, honest, and proactive communication about the rationale behind significant decisions to build trust and mitigate negative reactions. Leaders of change develop comprehensive stakeholder maps and actively engage diverse groups to anticipate reactions and build support for organisational changes. They integrate ethical considerations into decision-making processes, particularly for sensitive issues like executive compensation, to maintain long-term credibility. Effective change leaders proactively establish robust governance structures, incorporating independent directors and ethics committees, to rigorously question assumptions and ensure that decisions harmonise with organisational values and stakeholder expectations. Change Leaders Must Have Contextual Awareness.

“Effective change leadership balances strategic vision with ethical awareness and robust governance, engaging stakeholders transparently and considering the broader context to navigate organisational change successfully”

Contextual Awareness Change Charade: The concept of change management charade becomes particularly relevant in such scenarios. When leaders fail to grasp the full context of their decisions, they risk engaging in a superficial performance of change management, merely creating an appearance of change without substance. This disconnect can lead to resistance, scepticism, and ultimately, the failure of change initiatives. Effective change leadership requires a holistic approach that considers not only internal organisational dynamics but also external factors such as economic conditions, public sentiment, and political climate. By developing comprehensive stakeholder maps and actively engaging diverse groups, leaders can anticipate reactions and build support for organisational changes. This proactive stance helps prevent the perception of change management as a mere charade and instead fosters genuine transformation. Moreover, integrating ethical considerations into decision-making processes, particularly for sensitive issues like executive compensation, is crucial for maintaining long-term credibility. Establishing robust governance structures with independent oversight can help ensure that decisions align with organisational values and stakeholder expectations, avoiding the pitfalls of short-sighted actions that may undermine change efforts. 

Final Thoughts: Does your senior leadership team demonstrate true contextual awareness when implementing change, or are they involved in an absurd pretence, a change management charade, intended to create a pleasant or respectable appearance of change without addressing the underlying issues?

Further Reading: Change Management Charade - Leadership of Change Volume 8

Have a fantastic weekend with the ones you love and care for, enjoy some fresh air, exercise, eat, drink and be happy.

Peter consults, speaks, and writes on the Leadership of Change^®. He advises CEOs on how to prepare and align their corporate leadership teams to successfully lead their organisation's change.

For further reading please visit our websites: https://www.a2b.consulting  https://www.peterfgallagher.com Amazon.com: Peter F Gallagher: Books, Biography, Blog, Audiobooks, Kindle

Leadership of Change® Body of Knowledge Volumes: Change Management Body of Knowledge (CMBoK) Books: Volumes 1, 2, 3, 4, 5, 6, 7, A, B, & C available on both Amazon and Google Play:

~ Leadership of Change® Volume 1 - Change Management Fables

~ Leadership of Change® Volume 2 - Change Management Pocket Guide

~ Leadership of Change® Volume 3 - Change Management Handbook

~ Leadership of Change® Volume 4 - Change Management Leadership

~ Leadership of Change® Volume 5 - Change Management Adoption

~ Leadership of Change® Volume 6 - Change Management Behaviour

~ Leadership of Change® Volume 7 - Change Management Sponsorship

~ Leadership of Change® Volume A - Change Management Gamification - Leadership

~ Leadership of Change® Volume B - Change Management Gamification - Adoption

Coming Summer 2024: 

Change Management Charade - Leadership of Change Volume 8

By Peter F Gallagher

Keywords: Business Strategy, Change Management, Leadership