After many years toiling for large companies and chronicling corporate behaviour this correspondent has only one useful observation to make: there appears to be an uncanny correlation between the having of meetings and the wasting of time.
Today we present the findings of our research paper “Meetings: Inverse Correlation to Performance”.
Broadly, there are two types of employee: those who attend meetings and those who do work. Paradoxically, it is the former who tend to lord it over the latter and it is the former – through their patience in sticking about through endless long, useless hours of meetings perfecting the discipline of appearing to be engaged – that climb the corporate ladder.
This is why there are a lot of useless people at the top in both the public and private sectors because these people have spent most of their time in meetings rather than engaging in useful activities like doing work.
We are by no means suggesting that all meetings are a waste of time. There is a marvellous vignette in a story about the demise of Babcock & Brown. When the merchant bank was in its death throes, receivers and managers verily appointed, somebody opened a meeting room door and discovered some of the last action heroes of Babcock engrossed in a meeting. They were plotting a landmark deal, no less than the takeover of Telstra; that’s right, the takeover of Telstra by Babcock & Brown.
Had they pulled this off, they might have saved the company. And to be fair, if one were to be plotting to take over a company far larger and less dodgy than one’s own by offering one’s own plummeting scrip in payment, one would probably need to have a few meetings about it.
Not all meetings therefore are useless.
Seeing red on tape
Most columns in financial journalism are fairly useless too. Having penned many a useless column ourselves, we can attest to this. So it is that, in order not to be useless, we must provide real-life evidence of our theory of the general uselessness of meetings.
Compelling evidence for the general uselessness of meetings arrived this week in the guise of the annual report for the Australian Securities & Investments Commission. ASIC is by no means alone in having excessive meetings but its annual report contains some rare and extremely useful meetings data.
We draw readers’ attention to page five “Key Outcomes 2013-2014 … Engagement: 685 meetings with industry groups and other stakeholders”.
It should be noted that these were not meetings with people who had been ripped off. While 35 per cent of commission expenditures were allocated to enforcement, 9 per cent of expenditure was allocated to “engagement with industry and stakeholders including considering relief and other applications”. This refers to helping companies get around the laws of the Commonwealth – for instance, providing exemptions to the likes of Facebook and Twitter from being considered to be part of large companies.
There are some useful meetings breakdowns too. “In 2013-14 we held 58 meetings as part of our business liaison and engagement program with investment banks”. There were also 35 meetings with hedge funds, plus a round-table, a road-show and an assortment of programs and reviews.
There was no evidence, however, of meetings with people who had lost their life savings. If one has lost one’s life savings due to the fine work of a fund, a financial planner or an investment bank, one is invited, not to a meeting, but rather to fill out a form.
Comparing this proliferation of meetings with other data in the report we find “major enforcement outcomes … illegal schemes shut down or other action taken in 2014 was “nil” compared with 39 in the previous year.
We can glean also some valuable information about regulatory priorities by searching for references to “red tape”. In 2013, under the previous government, references to red tape were nil. In 2014, however, there were 11 references to red tape.
On the providing of relief – that is, giving orders to prevent companies from doing annoying stuff like complying with the law – it is said, “Businesses frequently approach ASIC for assistance to help make the law work better for them.”
Relief applications received rose from 2023 in 2013 to 2729 in 2014, an increase of 35 per cent.
Relief applications refused in 2014 were 133 (4.9 per cent of applications received), a far superior performance to the 9.2 per cent of applications refused in the previous year. Indeed, relief decisions are now called reducing red tape.
Laws of probabilities
In a 2012 research in Economic Letters, author Derek Pyne notes: “Empirical studies have found that increasing the probability of punishment has a greater effect on crime than the severity of punishment.”
From the ASIC annual report we can deduce some other probabilities. The probability that a large financial institution can pop in for a chat is 99.99 per cent. The probability of getting an exemption from the law is 96 per cent. The probability of a prosecution of a bank following an investigation is approximately 0.00 per cent.
The probability of prosecution of a Gold Coast mortgage fund spiv who has wiped out the life savings of thousands of people is 0.01 per cent. The probability that the oily promoters of said funds are still cruising about the Gold Coast in a luxury automobile and residing in a mansion is 98 per cent.