Ordinary guy with surprise element

April 4, 2003

When Howard Davies, chairman of the FSA, decided to take up the post of director of the LSE, the City was 'stunned' but, then again, this regular bloke often has that effect, says Terry Philpot

Howard Davies became secretary to the British ambassador in Paris at 23 and ever since has moved in and out of what he calls "the twilight world" of private and public services, heading, among others, the Audit Commission and the Confederation of British Industry. He sits now amid the dramatic skyline of Canary Wharf as the world's longest-serving financial services regulator. So when he says that writing book reviews is what he has enjoyed most, it is unexpected. But then Davies is famous for being an unusual person, with an unpredictable career path. And, true to form, he will move later this year from the Financial Services Authority to become director of the London School of Economics. Davies will lead one of the world's most prestigious academic institutions, when academia is one of the few places in which he has not worked - bar a governorship at De Montfort University, where he chaired the finance committee.

One broadsheet's business pages said that the City was "stunned" by the announcement of Davies' departure from the FSA late last year - an exaggeration, given that he was going only four months earlier than his contract allowed. But at the LSE, where he will succeed Anthony Giddens, surprise at his decision has been allied with an openness to see what a new broom will do. Davies started talking to the institution last summer before making a formal application. He had been tipped for the governorship of the Bank of England, where he had previously been deputy governor, but assured LSE selectors that if they offered him the directorship, and he accepted, he would not withdraw if the Bank of England job then came his way.

As executive chairman of the FSA he has seen what he has called "the most accountable financial regulator in the world" created from nine different City regulators. But his time has been marked by the collapse of Equitable Life, his refusal to set up an inquiry into the mis-selling of mortgage endowments, the split capital investment trusts scandal, in which thousands of people lost millions of pounds in investments they understood to be low risk, and wounding criticism from the Treasury select committee of the FSA's handling of this scandal. While a job in business might have seemed an obvious next step, Davies says that working at the FSA makes one see the less attractive side of the financial sector and has not left him wanting to run a financial institution.

He is also keen not to be seen to be narrowly focused - the nearest he ever comes to pigeon-holing himself is when he says that some people might see him as "a professional chief executive" - hence his remark about book reviewing. It allows him, he says, not to be narrow. What he reviews certainly isn't. The nearest he comes to reviewing books related to his professional interests are those on economics for The THES . Others range from novels for The Times Literary Supplement to books on football for The Times . (He is famously a Manchester City supporter and a key to his outlook may be the one lesson he said he drew from Sven-Goran Eriksson's On Football , which was "it's more important to win than to not".) He has also reviewed for the New Statesman and - for 15 years - for The Literary Review .

"It is also something that keeps me sane," he says. "I might be dealing with an intractable problem here and then I go home and relax by having to think about something entirely different. What I also like about reviewing is that I have to think about the book - why did I like it or dislike it?"

There is a certain ordinary blokishness about Davies, the rather extraordinary bloke. He has a knighthood that he refuses to use (absent even from his letterhead), which he says was recognition for the FSA; he finds something "Ruritanian" about the honours system. Cricket, football and his children are listed as pastimes in Who's Who . His office is a corner of an open-plan one on the 18th floor of a tower block, from where he, not his secretary, descends to greet visitors and see them out.

To date, the occasional article and the more occasional review have been his only literary output. He sees the LSE as offering more opportunity to write and talk on a larger number of subjects than he does now. And it is the breadth of interest available in such a post that attracted Davies. He sees it as a culmination of many interests from many of his past jobs - business, finance, economics, education, social sciences, management (he worked for McKinsey & Co), and politics and government (he was one-time special adviser to Nigel Lawson when Lawson was chancellor of the exchequer).

Joining the diplomatic service at the start of his career was, Davies says, "a mistake, a purely protocol job" but he did have a career strategy. It worked, but not for the reasons he had imagined. The 1970s, with nationalisation and increasing tax revenues, convinced him that the government was getting stronger and stronger, and the example of the French civil servant moving between public and private sectors, along with his own interest in the interface between government and the economy, seemed attractive. As it was, by the time he had started to implement his strategy, the opposite was happening - the government was retreating and the disciplines of the private sector were creeping into public services.

The LSE job also attracted him, Davies says, because he knows that Britain's potential depends on a high-quality education system with interchange of ideas and information between the sector and business.

Having decided to leave the FSA, managing a top-ranking academic institution such as the LSE seemed both worthwhile and something that he wanted to do.

His most recent preoccupation with education was his report for the government on how schools can help develop a greater enterprise and business awareness among pupils, and some of his recommendations have been accepted. But while he suggested that everyone in the school system could take some responsibility for this, causing business awareness to permeate the timetable, he does not think the idea could be applied to higher education because of the variety of courses and student needs.

He believes that the era of increasing volume in universities is now at an end but that future opportunities are fourfold. First, although the full impact of top-up fees remains uncertain, they will mean more money. Second, although the financial settlement for universities may seem to some to be too low, it is still more generous than in the past. Third, connections with business need to be developed. Finally, he is keen that endowments - by wealthy or less wealthy alumni - should be as common here as they are in the US (he has an MSc from Stanford Graduate School of Business, as well as an MA in history and modern languages from Oxford).

If there has been one theme to emerge from the LSE recently, it has been how to think about this changing world, where the traditional lines between the public and private sectors are becoming increasingly blurred. Giddens may be the school's best-known theorist but he is not the only one.

Giddens is usually credited as being the begetter of the third way political philosophy and a major influence on Tony Blair. Davies, on the other hand, finds it "very difficult to situate myself politically".

Anyway, he adds, academic institutions should not be characterised by their most prominent member - "The LSE is all over the place in many, many areas of government."

The only time he did try to join a political party - Labour in 1976 - it turned him down because he was not a member of his trade union. He had resigned from the Diplomatic Service Association because of its opposition to the then Labour government's reforms for the service. Even then, it seems, Davies was being unpredictable.

You've reached your article limit.

Register to continue

Registration is free and only takes a moment. Once registered you can read a total of 3 articles each month, plus:

  • Sign up for the editor's highlights
  • Receive World University Rankings news first
  • Get job alerts, shortlist jobs and save job searches
  • Participate in reader discussions and post comments
Register

Have your say

Log in or register to post comments