Interview with the RBS finance chief - Bruce van Saun

I recently met with the finance chief of Royal Bank of Scotland for Financial Director magazine. In his first public interview, and just before the ructions over Stephen Hester's bonus, Bruce van Saun spoke about his work in helping turnaround the bank, the progress made so far and the constant withering criticism faced by the board.

What surprised me was how much he seemed to have accepted that he was working in the public good. Also how much he relished the chance to work in such a stricken institution. Not sure I would have been so bold. That perhaps says more about me than it does about van Saun. Ironically, he was also surprisingly content with the separation between the bank's management and the government on the running of RBS. That may have changed since the Hester bonus furore, though he hasn't told me it has. Anyway, click here for the full interview. And let me know what you think.

Nick Clegg in a muddle over John Lewis

After writing yesterday about Helen Weir joining the John Lewis Partnership (JLP) as finance chief a reader suggested I have a look at Nick Clegg's impassioned plea for more companies to be like the department store that is "never knowingly undersold".
Clegg said back in January: "The 1980s was the decade of share ownership. I want this to be the decade of employee share ownership. We need more individuals to have a real stake in their firms, more of a John Lewis economy."
There was a glaring problem with Clegg's statement, my correspondent claimed. He didn't understand what he was talking about.
I didn't give it much thought at the time, so I decided to have a look. And it seems Clegg had his corporate wires crossed.
The problem is this. There are no shares in John Lewis. It's a partnership structured around a trust which owns the business for... its partners - the employees. No shares. Anywhere.
So when Clegg argues for more employee share ownership, while at the same time holding up John Lewis as the shining example of worker engagement, he's actually talking about two very different structures.
Share ownership is share ownership. You have your stake and the board stays in charge. Your capital is there but it's liquid and disposable. Arguably its also about short term gains in the share price, rather than the long term prospects of the company. That's not what happens at JLP where you become a partner on joining and begin to take a share of profits by way of an annual bonus. Partners also have direct influence on the way the business functions through the Partnership Council. Eighty percent of the 80 or so council members are directly elected by the staff, and the council also elects five of the directors on the JLP board. Direct influence see.
Shareholders would be lucky if they got an annual report through the post these days. They remain at a much greater distance from the board. Their stock would be in the mix along with the stock of institutional shareholders and everyone else and they could sell up and walk away as, and when, the fancy takes them. Not so easy to chuck in your job/partnership. Share holders might receive dividends, if they're lucky, but that is probably in the gift of the board anyway. 
JLP partners receive their salary and a share of the profits. Everyone, from stockroom boy (I don't really know if JLP has those) to the managing director, gets the same percentage share, though obviously based on different salaries. There are hotels owned by JLP for staff, generous store discounts and after a couple of decades with the business, six months paid leave.
So, when you look at it, the really radical option for UK business is the John Lewis structure. But that's not what Clegg was describing when he talked of shares. He was talking about something else. It's difficult to say how he got confused. But he has conflated two options for the future of UK business leaving us not really sure what he wants. Where's the vision? What is Clegg banging on about? Sadly, we have another example of government failing to bring clarity to the table when it attempts to articulate a future for UK business.
The question before Clegg is whether he really would back John Lewis as a model. Big tax breaks for new companies owned by its employees through partnerships where membership of the partnership is universal to nearly all employees would be an intriguing move. Sadly, I suspect expanded share ownership, which Clegg seems to want, would leave us in much the same position that we are currently in. At the very least it's hard to see it would provide the kind of commitment and motivation in the way the JLP partnership does. Clegg, seems to be in a muddle when he strives to find a model for, then form policy to achieve, his "responsible capitalism".

*Of course there are other partnerships around. It's interesting to speculate how accountancy and law firms might develop if, instead of restricting partnership to a select few, they expanded partnership to more junior employees. But that's being provocative. 

IFRS: Lords wonder if it's legal

An influential House of Lords committee has called on the government to investigate whether international accounting standards actually conform with UK law.

Lord Macgregor, chairman of the Lords economic affairs committee, has written a letter to Norman Lamb, a minister at the department for business, asking for a view before a debate on audit in the House of Lords expected in March.

Macgregor is concerned by claims that international standards (IFRS) have undermined the "obligation on auditors under company law to give a true and fair picture of audited accounts and led to a rule compliant, box ticking approach instead of the exercise of prudent judgement."

During hearings of the economic affairs committee Macgregor heard from City veteran Tim Bush that IFRS could breach UK law because it failed to prioritise "true and fair".

Macgregor suggests in his letter that it was "known" within UK watchdogs the Financial Reporting Council (FRC), and the UK Accounting Standards Board (ASB) "several years ago that IFRS were not in conformity with UK company law."

The question will be intensely sensitive for the regulator and UK standard setter which have backed international standards.

It's only to be guessed what the implications are if it is proven that IFRS are at odds with UK law. They have been in place since 2005 and if key players did know there was a problem there will be some stiff questions.

It raises the spectre of no audits carried out under IFRS being compliant with the law and UK audits potentially being undertaken with a key plank of UK business regulation missing.

It will be fascinating to see what Norman Lamb will have to say about the issue. At the least this could prove to be a classic uh-oh! moment for many people involved.

The big question will be what it means for the audit of banks during the run up to the financial crisis. If IFRS was not compliant there will be an issue about the status of audits that used international standards and whether they could have drawn the wrong conclusions about the financial health of banks. That's a thought that sends a shudder down the spine.

At the very least though Macgregor's letter could move what has so far been considered a fringe complaint about accounting standards to the centre of fallout and debate about the crisis, and how we deal with its implications.

Unless, of course, Lamb dismisses the claims and asserts that IFRS is quite in harmony with UK law. At which point the whole thing could fizzle out without further fuss. Though Lord Macgregor, and his fellow committee member Lord Lawson, might feel absolutely confident of their point, and keep pressing. This has the makings of turning a side show into a headline issue in the ongoing saga of dealing with the crisis.

Weir in the John Lewis way of doing things

Interesting news at the end of last week when Helen Weir, the former finance director at Lloyds TSB and once of Kingfisher the retail group, was revealed as the new finance chief at John Lewis, the employee owned department store chain.
Weir left Lloyds last year after the arrival of new chief executive Antonio Horta-Osorio. It was reported that she had wanted the CEO's post at the bank, but Horta-Osorio's arrival might well have prompted a clear out of the old guard in any case.
This week, however, it emerges Weir has had her last bonus from Lloyds docked by some £218,000. She is among 13 directors to have been subjected to bonus claw backs. In short they have been made accountable for the performance of the bank through their bonus cheques. Nice to see executives putting their money where their mouths once were. 
The news keeps up the pressure on executive bonuses in the City where Weir was seen as a high flyer.
But the move to John Lewis takes her well away from that world. No more analysts. No more institutional shareholders to please - no more City establishment to network with, no more share price to keep her awake at night. John Lewis is a world away from that. Deputy prime minister Nick Clegg recently said he wanted big business to be a bit more like John Lewis - with employees taking a greater stake in their companies. In short he made John Lewis the poster boy for the kind of economy he'd like to see.
That's a big responsibility for Weir who comes from quite a different world. John Lewis should be more comfy, focused on long term investment, the interests of its 'partners' (permanent employees) and its all consuming customer service ethos. It will be quite an adjustment, and one wonders whether after so many years in the City just how large the cultural gap might be. One can imagine boardroom meetings where chairman Charlie Mayfield has to dampen the City-inspired ardour of Weir to slim budgets, think short term.
Having said that, and having once spent an agreeable evening sitting next to Weir at a dinner, she's super sharp, savvy, and approachable, a bit like the brainy one from St Trinian's. I doubt she will struggle to get a grip on the John Lewis way of doing things. But it really does mean coming to terms with a whole new set of drivers. Of course she does have experience of retail, with Kingfisher. But John Lewis sets its own standards. It's a very different kind of retail. (And we got our curtains there).
And the bonus? Everyone gets the same percentage bonus at John Lewis, regardless of their role. Weir is in the trenches with the staff in a way she surely wasn't at Lloyds.

The Making of a social media CFO: what it takes to count the costs of Facebook, Google, LinkedIn and Yahoo!

With Facebook's flotation about to raise unthinkable sums of money, I thought it was worth giving a thought to those financial whizz kids who make sure the techy whizz kids don’t blow all their money on highly sugared drinks and the latest version of Grand Theft Auto.
Yes, all the big name social media companies - Facebook, LinkedIn, Google and Yahoo! have finance chiefs keeping a check on how many iPods and snowboards have been ordered on the company account (I read recently Bill Gates’ kids are not allowed Apple products, nor Melinda. Shame. Also, Mark Zuckerberg appears to spend a packet on private jets. See the prospectus).
So let’s call it the Big Four of CFOs and let’s have a look at what it takes to get the financial hotseat at one of these titans of the internet.
Let’s start with money. Between them these four giants turnover roughly $49bn (£31bn). The biggest of those, you will not be surprised to hear, is Google where finance is headed by Patrick Pichette and revenues are around $37bn. That, you will instantly notice, is marginally larger than the other three. Next up is Yahoo! raking in around $6.7bn under the financial beady eye of Tim Morse. Then of course there’s Facebook, which we now know takes in around $3.7bn, accounted for by David Ebersman. Lastly, we have Steve Sordello for LinkedIn, in charge of a more modest affair with revenues upwards of $240m.
Clearly you don’t have to have massive revenues to be a high profile internet company, but it helps.
How about age? I make the assumption that to be a proper exec in a social media behemoth a CFO must have been born since 1982 (Mark Zuckerberg was born in 1984), when the internet was officially launched. So maximum of 30 to qualify for the age of geek. None of our candidates, however, make the cut on that count. The youngest is Facebook’s Ebersman (Zuckerberg’s senior by 14 years) at 41. Tim Morse at Yahoo! is 42, while Sordello at Linkedin, I estimate, is around 43 ( I can’t find his age online - poor show really). However, the grandad of the four is Pichette at 48, ancient by Facebook standards, and well beyond the age of Carousel in Logan’s Run.
What about their professional background? What on the CV gives them the springboard into these social media roles? Starting where we left off, Pichette was vice president at Bell Communications a good old fashioned telephone company in Cananda and quite some way from the traditions of Silicon Valley. Morse was at Altera Corp making semiconductors. Ebersman is interesting because he was in biotechnology at Genentech. Of the four the closest to the internet business is Sordello having previously been CFO at TiVO and Ask Jeeves. Mixed backgrounds then, proving that submersion in the internet is not necessarily what the social media corps want from their finance chiefs. But even Pichette had some exposure to the commercial aspects of the internet.

Ebersman is the outlier here having worked in biotechnology. BUt that's all about research and development. Something Facebook will no doubt find very familiar.
One last test for the moment - LinkedIn connections and recommendations. Pichette has a lowly three connections, very little else and no recommendations on his sparse profile. Sadly, I couldn’t find Morse on LinkedIn - an obvious oversight for someone in his position. Ebersman, of Facebook, who must live by the number of virtual contacts and friends he has, registers 375 connections but sadly no sign of any recommendations. Champion here, of course, is Sordello. With 500 connections and four recommendations, the FD of LinkedIn is, by his own website’s standards, the most networked of the four CFOs. 
So what do we learn from this? Certainly it’s possible to be embarrassingly absent from a major social networking site and still be highly placed in the internet business world  (succour for those webphobes out there). Pichette demonstrates that a disengaged presence is all you need. Well, maybe for someone who has made it as big as he has - not sure that goes for the rest of us in this social media age. It remains intriguing though that two CFOs would apparently ignore the very medium that puts bread on their tables.
We also learn you don’t even need to have been raised and conditioned in Silicon Valley. You can cut your professional teeth in Canada of all places. Or, make you money counting the cost of grisly experiments in biotech. Or make semiconductors. Silicon Valley is not as closed as it may seem. For some things.
There is an important point there for ambitious CFOs. Your experience may have more application than you first imagine. You might be head of finance for Widgets in Widness right now. But look closely and you may have something that the internet world will buy. That “thing” will have to be the doorway by which you understand business drivers on the internet. Without that, my guess is, you’re sunk. The accounts you can do. What you need to master is the skill to allocate resources.
Lastly, the four prove beyond any doubt that you can be quite old (40 at least) and still work for social media companies. Your bosses may be young enough to be your children (almost. OK, not really), but they’ll still give you a job. As long as you’re in accounts. Not writing code. Or playing Skyrim or Grand Theft Auto. Or something.

George Osborne and making business feel bankers' pain

George Osborne's claim that there's an effort afoot to create an anti business culture in Britain makes for interesting reading.

Interesting because the claim, in a speech to the Federation of Small Business, appears to pull the whole of business into the morass caused by bankers, high finance and the City. His loose language suggests everyone who worked to turn a profit, whether in the City, manufacturing, service industries, technology - the full spectrum of money making activities - is now being pilloried for their part in the financial difficulties we find ourselves in. In short all business should feel the bankers' pain and its simply not fair.

But it's not true that everyone is to blame, but then he's not saying that. However, it's also not true that the anger out there is wholesale anti business. People are able to distinguish between the City and its complex financial deals, on the one hand, and the rest of business on the other.

Perhaps he's suggesting that the opposition is attempting this. I don't believe that's true. The opposition has clearly seen an opportunity to attack the government over bankers, but that doesn't equate to rubbishing all business activity.

No, by pulling all of business into the equation the chancellor may hope to convince the wider business community that it is under attack from the opposition and its supporter and as a result identify with his stance over bankers and the economy.

This approach only helps muddy the relationship between business and politics even further and clouds thinking about what the right policies are for the UK economy. A senior businessman I know recently said this in a note he sent me: "I may be viewing the past through rose-tinted lenses, there seems to be an absence of conviction politicians - biggest evidence is the lack of polarity, and whether or not leaders want to lead or simply follow the focus groups."

I think it illustrates a point. Osborne may feel he's loosing the business vote (there are more than two million registered enterprises in the UK and around 230,000 come into being each year and he's shifting ground opportunistically to persuade them round. He wants to have their backing, be the party of business, and one way of doing that is convincing them they are all threatened by the current row over bonuses and the place of vast institutions, like banks, in our civil society. But creating such a confusion does not articulate a conviction. Far from it.

The banks are different from "business" and to conflate them is to hold back from being entirely clear with the business community. Business likes clarity, in politics and in policy, and this confusion does not achieve that. Far better to work on "growth" policies for UK business than mire them in a political row with the opposition over bankers.

Rock hard - the new FD of Glencore Xstrata

Want to be finance chief at a $200bn company? Well, Trevor Reid, FD at Xstrata just won the lottery becoming the head of finance at the newly merged company, Glencore Xstrata.

He joined Xstrata in 2002 after cutting his teeth in banking and especially corporate finance. Interesting because there's an awfully big integration task ahead as the two companies come together. the deal will be huge but they will no doubt be hoping to make huge savings as a result. Which means Reid is only just beginning to get busy.

But it is a team move. Mick Davies, CEO at Xstrata, takes on the same role in the merged group. They know each other well, which should bode well.

In the past Reid has been noted as one of the highest paid FDs in the FTSE 100. One wonders what will happen to his pay now.

CFOs on Youtube - Dell and Citi finance chiefs 'rock'

I was surprised to find this, (but now I think about it, I don't know why) - an article singing the praises of CFOs and CEOs for using Youtube as a medium for investor relations.  They apparently "rock".

Youtube is not just about cats falling off pianos, kids riding their bikes in dustbins and teenagers willing to get lude for their mates in front of a smartphone camera. No, Youtube is a serious tool for communication and these executives set out to prove it.

Which raises an interesting point. If you thought that communication was a second tier ability for CFOs, then think again. With tools like Youtube exposing us to the glare of publicity for all eternity, being able to communicate well - that is fluently, coherently and with clarity - is a primary skill. You're going to need to get your head out of the books, come out of your financial shell and start learning how to perform. The earlier you get the experience, the better. In fact its about time public speaking went on the curriculum for trainee accountants, that way embedding it in the very fibre of the profession.

The article dates from last year, so apologies for that. But well worth a look all the same to see how they're doing it at Dell, Novabase and Citi.

Sir Nigel: reform accounting for banks

Sir Nigel Lawson, former chancellor of the exchequer, rails against the current regime for bank accounting this morning in the Financial Times.

"The auditing of banks’ accounts, however, is fundamentally flawed in itself. The IFRS accounting system itself has proved to be damagingly pro-cyclical, and the ability to pay genuine (and genuinely large) bonuses out of purely paper profits, which are never subsequently realised, is at the heart of both the bonuses that cause such public and political outrage, and the reason why bank management consistently does so well when bank shareholders do so badly."

He goes on the back a call from the Bank of England's Andrew Haldane for a radical rethink of bank accounting. Sir Nigel says: "He is absolutely right." Over to the International Accounting Standard Board. FSA chief Adair Turner is also backing this. Difficult to know whether its getting some traction.

Facebook CFO tops Zuckerberg's pay

Been browsing Facebook's IPO prospectus. Trawled over this week by commentators, the document,read in depth, produces some fascinating snippets. Here's some that kept me reading.

First, Mark Zuckerberg, Facebook's founder and CEO, appears to have settled for a base salary of just $1 (yes, that's right a single dollar) from January 2013. His salary in 2011, the prospectus reveals, was a handy half a million. One assumes Zuckerberg feels that money made on flotation and presumably bonuses, will be ample reward.

Also interesting is the sum spent ferrying Zuckerberg around in private jets, which ran to $690,00 last year. The prospectus declares it was part of a comprehensive security plan for the CEO.

According to a declaration on the board's remuneration chief financial officer David Ebersman was paid much more than Zuckerberg. 2011 saw the finance chief bag salary and stock options worth $18.6m, against his CEO's $1.4m. Base salary for Zuckerberg was $500,000 while Ebersman took home £300,000. Zuckerberg, let's not forget, is the largest stock holder with a  28.4% share, though he controls a tad over 57%.

With revenues of $3.7bn last year, Facebook appears to have an enviable balance sheet too. $6.6bn of assets against $1.4bn of liabilities. That includes $2.3bn of cash, or cash equivalents.

Which makes you wonder. Why bother with an IPO?

Government, the City, RBS and its punishing the leaders

This was the week in which both the former CEO of Royal Bank of Scotland and the man brought in to mend the broken bank were both punished.

Sir Fred 'the shred' Goodwin was stripped of his knighthood to become plain old Fred Goodwin and his successor, Stephen Hester, was forced to give up on his annual bonus of nearly £1m in shares after a public outcry, mostly, it has to be said, among politicians who seemed extremely reluctant to let the issue go.

So there's an irony. While Goodwin is widely accepted as the man who drove the disastrous strategy that nearly destroyed the bank, Hester is widely held to have done a pretty good job, along with his other executives, of fixing things, the share price aside. Hester's bonus was, of course, the bonus contractually agreed when he took on the onerous job. Somehow, without actually breaking with his contract, politicians have forced him into giving up on part of it. The prime minister played his own part in this but simply withholding his backing for the man.

Goodwin's treatment comes nearly fours years after he departed RBS and was forced to give up on some of his pension entitlements. It is puzzling why the knighthood issue should reach its climax now, so long after the main event. It seems that politicians had lost touch with public opinion and suddenly found they had to move sharpish to get ahead again. For all intents and purposes, whether deserved or undeserved, the timing inevitably made it look like political expediency. And one wonders how much longer politicians can drag Goodwin out for a public thrashing. Perhaps, for as long as we feel the effects of the crisis Goodwin will be the handy bete noire to be wheeled out each time politicians need a legitimate victim for some enthusiastic corporal punishment. Goodwin is our chosen whipping boy whose fate is to provide a focus for our pubic anger and need for action.

But the treatment of Hester and Goodwin perhaps signals something else. The realignment of the relationship between politics and the City, possibly big business in general. We saw this last year when politicians finally found the ammunition to end their dependency on Rupert Murdoch and his media empire. Goodwin and Hester have become an extension of that effort. This week the politicians pushed back on symbols of the financial crisis in a visceral way. Hurting Goodwin and denying Hester was the articulation of a view that things were out of kilter, that politics has, for too long, had to woo business leaders who wielded power that had no public mandate and was borne out of their ability, and propensity, to generate vast profits and, of course, support the Treasury through not insignificant tax contributions. This week politicians regained a degree of control they have not, perhaps, enjoyed since the Big Bang deregulation in 1986. Until then the City needed politicians. But the relationship flipped. Gordon Brown and Tony Blair understood that only too well. And that's why they gave the City a New Labour cuddle. Coseying up helped write a narrative that legitimised the City and its profit driven values, as long it helped strengthen the Treasury's coffers for redistribution later.

What will be interesting to see is if this is a watershed in which that relationship goes through some lasting change. Business leaders in the City will no doubt be pondering that question too. When faced with the next big piece of onerous regulation, what leverage will the City have with emboldened politicians who might be feeling they now have the upper hand? Which government minister would want to be reported dining with City giants, winning over the masters of the Universe, in the current political landscape? Cameron's recent veto (if, indeed, it was that) of a European fiscal pact was cloaked in a justification for protecting the City, and yet, in now seems it was coloured by an opportunistic effort to appease his own euro sceptic party. Politics, whether high or low, trumps business.

Where public opinion goes politicians are bound to follow and the moments the public wants City financiers in the stocks. It would be reasonable to speculated that there are businessmen out there who this week vowed never to get close to government themselves. The capriciousness built in to the treatment of Stephen Hester will be a warning. There are those that will now wonder whether politicians would ever have your back when things get tight. If public opinion shifts, so will your business partners. The foundation element of business, the contract, was shown to have stood for very little indeed.

Of course, it was perhaps naive to agree that Hester should have a big bonus when he was signed on. That bonus though, would have looked modest at the time, and a necessary part of getting a big hitter into a tough job. But reneging (there's a strong word) on that deal will raise questions of trust bringing damage to government/City relationships for some time to come.

That said the suspicion must be that the balance of this relationship cannot permanently change unless the influence of the City were also to be permanently reduced. Its contribution to government revenues and the involvement of so many City figures in politics would suggest that this will be a temporary state of affairs. More's the pity, manufacturers might say. An economy and government more focused on producers would be a warmly welcomed development. Let's see where this particular story runs.

Quote of the Day

From the Financial Times.

Paul Dollman, finance director of Menzies, is aware that the group has a public perception problem.

“If you pick an average man or woman in the street and ask them about John Menzies, they’ll say ‘shops’,” he said. “Stunningly, people think we still have shops, given it is 12 years since we sold them.”

Ever get the feeling people just don't get what you're doing?

RBS and CFOs

Fred Goodwin losing his knighthood took me back to the Financial Services Authority report into what happened at the Royal Bank of Scotland to nearly kill the bank back in 2008. I couldn't help but feel that now politicians have decided it's their job to punish business people it would be worth checking which other individuals the FSA had damned. They didn't. As far as I can see.

There is an entire chapter on management, leadership and management culture and it seems to oddly hold back from drawing any conclusions except to say that the investigation raised a lot of questions about leadership. Which, must therefore damn everyone.
And then there is this intriguing quote in the FSA report drawn from a report by RBS' own group head of internal audit. This is what he said: "There have been a number of observations made during this review that the Group CEO tends to operate too often in the CFO role and that [the CFO] should be more independent in his decision making’.

It's not entirely clear in which context these observations were made. This could have been day to day, it could be confined to a single event or deal, such as the acquisition of ABN Amro.
That said no CFO would want to be written up in this way.

It raises an interesting debate about just how 'independent' a CFO needs to be to fulfil his duty. After all, a CFO might challenge the CEO for a couple of reasons because 1. he's totally misguided and hasn't got a clue about the dire implications of what he's doing (and CFOs do sometimes think this, especially if lumbered with a dreamy, ideas-man of a CEO), or  2. because being the financial whizz on the board it's his job to challenge the dreamy ideas to make sure they are affordable and will produce a return. Number 1. is exceptional but necessary while 2. is routine, reasonable and also necessary.

There's no contradiction between fulfilling the business aims of your employer and still challenging an idea. There will be times however, when someone will make you feel that way. I suppose ultimately that should make you wonder whether you're in the right job. Or, whether you're CEO is.

Tax havens - a warning

I'm coming to this late, I know, but I couldn't help but bring some attention to Nicholas Shaxson's book Treasure Islands - an attempt to reveal, the scope, scale and influence of offshore tax havens in our politics and economics.

Published last year, Shaxson's view is that to understand global economics, and things like the failed efforts to develop some emerging economies, we have to understand the pervasive and pernicious nature of the offshore tax haven environment.

It's the first attempt I've read to articulate their role in the global economy and their influence over decision makers and the power they confer on those that promote and advocate their use.

It becomes truly chilling when he details the kind of sums that are being filtered offshore and the people who are doing it. In short Treasure Islands is a case for saying that the global economy cannot be reformed unless we get to grips with offshore havens.

It should be a stark warning to many about that they are up to. The interesting issue will be whether politicians will engage with it in the way Shaxson wants them to. Tax has already become a core public concern. Last summer saw a spate of demonstrations outside High Street stores over tax avoidance and this week calls were made to investigate whether Whitehall civil servants have been avoiding tax on their salaries. Tax is centre stage in political debate and we are, perhaps, more sensitive to it than ever before.

But after an initial wave of interest in the wake of the credit crunch, the big issue of what to do with tax havens seems to have receded - for now. Shaxson's book places it on the agenda of high politics and few in power can be unaware of its importance. But what to do about it?

The last part of Shaxson's book is a call to action for business, politicians and journalists to begin tackling the issue. But will people act?  Grasping what is at stake would have been difficult before this book. Shaxson gives it form and structure such that it can be understood.

Businessess leaders should be looking at this carefully. The use of tax havens goes to the heart of policy areas like sustainability, transparency and ethical business - all the topics that modern businesses love to talk about in their prospectuses and promotional materials. It's not just about saving energy and doing good works in the communities in which they work. It's also about being fair about the tax they pay. Shaxson emphatically makes the use of tax havens part of the ethics agenda (many others have argued this for years - it's just that Treasure Islands captures the issue in one neat readable tome). I suspect from Shaxson's point of view that unless tax havens are built into the corporate sustainability, transparency and ethics agenda then companies have barely begun to engage with these issues.

It's as well they do because I also suspect Shaxson has gone some way to giving the debate about tax avoidance fresh momentum. That's not entirely fair. In all honesty, this book should probably supercharge it.