The cost of delay

Delay in any area of life usually creates additional costs, be it through rising prices, the delay in delivering benefits, or a delay leading to worsening conditions and a slower recovery – for example, economics and health spring to mind. Delay in mending relationships usually makes a full recovery more difficult aside from the associated opportunity costs. Delay in a change of leadership when required politically or in the case of businesses are usually expensive.

In politics, some leaders seek any means possible to delay in their removal from power. It is a truism that failed leaders are often the most difficult to dislodge, particularly failed populist leaders who disregard the normal processes of a smooth transition of power. Frequently indeed, they’d rather damage the institutions and conventions that put them in power than concede to the inevitable consequences. 

For most, the failure to accept the inevitable seems an illogical course of action. Why add to the many behaviours and outcomes that ultimately prove your unsuitability for power in the first place?

In the UK  there’s been Boris Johnson, rather than accept his fate gracefully last summer, he blamed others for their betrayal, whilst listing his “achievements” and of course, not a shred of humility, regret or contrition. Trump in the US is an even more extreme example of the failure to accept his day was done. 

Africa has its share of politicians who cling onto power, indifferent to the idea that someone else actually may be able to do a better job than themselves and that their tenure is costly to so many. For example, Yoweri Museveni 79 years old, 37 years President of Uganda has in that time, overseen the continued decline of their economy – more than half of their people in extreme poverty with 60 % of the population earning less than $55 a month.

Paul Biya, 89 years old, President of Cameroon since 1982 – so confused he did not know why people had turned up to a rally in which he was giving a speech. His country crippled by extreme poverty, corruption and violence.

None of these people, these types of people, have any form of self awareness. They are not in the slightest aware of their limitations, their shortcomings that destroy the lives of millions of innocent people in their own countries. They do not understand the cost of delaying their removal from power. Yet they cling to it as if it is the oxygen that keeps them breathing.

Everton Football Club

Then among the most important of the least important of things we have Everton Football Club. In the statement issued on Monday 12th June, the outgoing directors were praised for having worked tirelessly “over recent months to assist with the preparation for a transition to a new Board.” They were praised for their “generous accommodation, which is both characteristic of them, and entirely in the spirit of the best values of our club.”

Were we about to see a smooth transition of power? A seamless handover to people charged with the recovery of the club, following years of mismanagement. Looking back, even from a distance of just 5 days, the idea of such now seems hopelessly naïve. A promise of further information about interim appointments in 48 hours disappeared without a trace, worse even, without any thought of an explanation as to the delay.

Then we have the position of Chairman. If the incumbent board had been working tirelessly for months to prepare for their successors surely the plan did not include giving the out-going Chairman a 48 hour period of grace?

Whatever was planned has surely not come to pass. Why? What have they been doing this last few months? Clearly not managing the business, not in the words of section 172 of the 2006 Companies Act “promoting the success of the company for the benefit of its members”. They’ve clearly failed to execute whatever transition plan they had.

What reassurances do the above offer regarding the condition of the company they leave behind?

The evidence of their failure is plain for all to see. The recruitment disasters in football, the managerial and director of football appointments, the financial results of the club, the reliance on debt and the need for the owner to put his hands in his pockets to stave off financial disaster, the alleged breach of profitability and sustainability rules, the lack of commercial growth. Even the great, lauded stadium project – that kicked off later than planned due to significant changes in design and re-budgeting. Whilst the build programme has been impressive, the delay in starting the project allowed Covid and its impacts, plus the invasion of Ukraine to become factors in the cost of construction and importantly, availability of and costs of financing the construction. Delay costs, almost always.

These are just the issues in the public domain, is it reasonable to suggest that a new board, a new executive, may unearth further concerns? In the context of delay being costly, what cost to Everton the clinging on to power of this board and executive?

Moshiri’s inability to deal with the necessary changes have proved costly to him, and from the fans perspective, costly to the club in terms of competitiveness and witnessing a good product on the pitch. The club’s reputation has sunk from “best of the rest” to being openly regarded as the worst run club in the Premier League.

The delay in dealing with the Chairman’s position in recent days has all the hallmarks of weak ownership and inevitably adds costs, possibly financially but certainly to the club’s reputation and further weakens any consideration that Moshiri is a man capable of behaving as a responsible and effective owner.

Regardless of any contractual dispute between two shareholders (after all the obligation to buy Kenwright’s shares – if it exists, and the willingness to do so by Moshiri is purely a contractual dispute between two parties, neither of which is Everton) it does not in anyway alter Moshiri’s ability to dismiss Kenwright as a director and thereby end his Chairmanship.

In the meantime, MSP and others including the already financially committed Andy Bell get on with the preparation for their time in effective control of Everton post their investment. I wrote a couple of weeks ago that Moshiri is set to cede control – that he will do effectively through the shareholder agreements and power over reserved matters contained in the investment/loan agreements.

Additional costs, a slower than anticipated turnaround, will increase the funding requirements which will ultimately strip Moshiri of his shareholding majority through dilution.

What the delay tells us about both Moshiri & Kenwright

The failure to deal with Kenwright, demonstrates again his unsuitability as an active owner of Everton Football Club. Kenwright may possess some of the “cling to office” qualities of African and other nations’ leaders, but that comes at a huge cost.

Kenwright’s reputation is in tatters and worsens the longer this impasse continues. It also considerably reduces Moshiri’s already weak grip on power. It demonstrates his failures of leadership. It adds cost and uncertainty for the incoming investors and ultimately makes their task even more difficult.

If Kenwright had a shred of compassion for the club and its people he would recognise this. If Moshiri truly exercised the power of a 94.1% shareholder he could resolve this instantly, at least in respect of the club. Failure by either to do the above is inexcusable, and just adds to the cost and damage of this highly corrosive and damaging partnership, now nearly seven and a half years into its destructive journey. Stop the delay, allow the recovery to start – now. 


6 replies »

  1. Hi Paul, is there any mileage in the smaller shareholders launching some kind of legal process against Kenwright for poor performance as a director?

    • Despite the obligations placed on directors in Section 172 of the Companies Act it is notoriously difficult to achieve a prosecution. Almost all judges consider it not to be an area they wish to get involved in

      • Thanks Paul.

        Delay is never good when there is no alternative.

        Fans demand immediacy. The situation demands immediacy. Sadly, the one wielding the power apparently doesn’t.

  2. Another astute piece but I do take issue with the line “Kenwright may possess some of the “cling to office” qualities of African and other nations’ leaders, but that comes at a huge cost.”

    Is this an African phenomenon as compared to any other part of the world or walk of life? I know you used these examples as illustrative points but to compare Kenwright to the senile 89 year-old Paul Biya is clumsy and plays to negative stereotypes about both Africa and older people. There are/have been egotistical, self-serving, delusional, and dangerous leaders the world over. Erdogan, Putin, Trump, Johnson, Bolsonaro to all immediately come to mind. You are right to call out Kenwright’s seeming attempts to cling onto influence/relevance at Everton but such is his world view, he’d probably be doing that whether he was 77 or 37.

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