It took only two days to choose the Pope. Where is the new energy regulator?
In response to the Wood Review the government promised an energy Tsar. In February the phrase “fast track” was used to describe the anticipated swift implementation. A recruitment firm was hired in June. In July the government announced £15million to “kick-start” the new Oil and Gas Authority (OGA).
Here we are, months later. The new UK energy minister, Matthew Hancock MP, has recently felt the need to remind us that the government only ever said the new regulator was to be established “in the autumn”. Aberdeen already feels fully in the grip of autumn, but technically Mr Hancock is giving himself to 20 December. The sooner we get an appointment the better.
The grapevine had indicated an appointment in post-referendum September. Mr Hancock was recently reported as saying that efforts to recruit the chief were on a “critical path” but that luring candidates away from their current job was “an issue”. You might be forgiven for thinking that, even in Aberdeen, they can get someone for £15million.
For once it is unlikely to be negotiating the candidate’s salary that is holding us up. The headline package is likely to represent a discount (excluding the knighthood) not a premium on the current job’s salary. The agony may be in the candidate’s lawyers’ review of the share options to be forgone. Unhappy reading when the alternative is a civil service salary. Can one hold onto share options after becoming Tsar? The existing employer might be strongly inclined to be flexible. The new employer may sense conflict of interest.
However, timing may be more of a problem than the individual’s cash on this occasion. The Minister sharing his recruitment “issues” with us may be a subtle way of pressing the Tsar’s current employer to release him (or her) early. Does the current employer want to be known for holding up the implementation of the Wood Review? I can picture their PR department wanting to instantly call for the chairman’s car and offering to help carry the Tsar’s bags.
Other professionals will have different priorities. On the human resources side the current employer’s problem is that they have to find a replacement. Could the Tsar be a victim of the skills shortage? Is back-filling the vacancy actually creating the delay here? Will a stock exchange announcement be required? Could it be price sensitive? Let’s hope so- the role justifies a senior figure doesn’t it?
A moment for us lawyers too please. Before you embrace “due diligence light”, don’t underestimate the potential for conflicts of interest, directors duties and contractual confidentiality issues here. The ideal candidate will undoubtedly have been party to very sensitive information and proprietary analysis. We are not talking about an academic. The role needs a poacher turned gamekeeper doesn’t it? I can hear the lawyers saying, “Wouldn’t a period of garden leave be prudent here?” Perhaps the Tsar is already raking up those autumn leaves.
Peter Murray is a partner at Scottish law firm Ledingham Chalmers where he specialises in UK corporate law and international projects.
