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Diary of an innocent in-houser

15 July 13

In the second of our occasional series, our hero entrusts an important point of interpretation to his non-exec chairman

What is it about putting an out of office reply, when you take a half day’s holiday, that seems to get you yet more emails and follow-up emails along the lines of: “Wasn’t aware you’re off enjoying yourself – could you possibly pick this up ASAP Monday and get back to me, say, lunchtime?” Last Monday was no exception, and having escaped from the open plan legal department to a meeting room to clear priorities, I was somewhat miffed when Adrian, head of HR and his overly keen sidekick Julian, burst in unannounced and sat down.

“Hi Jim,” said Adrian (I’m actually James, not Jim). “Hate to interrupt, but we have a legal point to discuss. Can’t give you the background, but we need to know, legally speaking, what does ‘or its equivalent’ mean in a contract? Just a simple legal explanation, no fancy QC ‘on the one hand this, on the other that’ opinion.”

How many times have we been here before – no background, no context, just a “simple explanation”? With a tired smile, I said, “Well, I need something, guys. ‘Equivalent’ to what? Are we talking a multi-million pound engineering supply contract or the office milk bill? You know, give me a clue.”

“Well, highly confidentially,” said Adrian, “Ronnie” – that’s Ronald, the CEO, by the way – “has a new company car, have you seen it?”

“Fantastic wheels,” Julian added. “Five litre, V12 convertible, special paint, all the gizmos, serious motor…”

Adrian interrupted: “The point is, Ronnie’s contract gives him a big diesel Merc, all the kit, but he’s gone off and replaced it with some kind of fuel guzzling monster sports car, without – as far as we know – the slightest reference to the board. I can’t let you see his contract, but it says he’s entitled to the Merc ‘or its equivalent’, so what’s the legal position?”

“Aren’t they all much of a muchness, these fancy executive saloons?” I ventured. Clearly not, by the combined HR reaction, especially as the new one was a petrol-fuelled convertible with a serious drink problem. “Jim, you’ll have to give a formal legal opinion on what is acceptable, then someone has to tackle Ronnie.”

“What you mean,” I responded, “is that you’re expecting me, rather than HR, to drop the CEO a note telling him to trade in his new car for something more modest. Not exactly career enhancing.”

“Well, it’s a legal matter, not an HR matter, Jim,” Adrian replied defensively. “We have to follow proper legal governance, after all,” murmured Julian, “and this looks like a breach of HR policy right at the top.”

I undertook to think about it and get back to them. I turned to the more important task of phoning back our chairman, who was seeking an equally urgent update on our major litigation. Having done so, and knowing his softer side, I asked after his golf. “Not bad,” he explained. “In fact, to improve it a bit I’m going up to Carnoustie next week, then St Andrews and Prestwick, and down to Lytham. To tell the truth,” he chuckled, “it’s part of a ruse to borrow Ronald’s new car. Have you seen it? It’s a super machine, and through one of my other non-exec positions I got him, I mean the company, a fantastic deal. I might even buy it off the company in a year or so.” I groaned inwardly but enthused appropriately and wished him well.

Later that day I bumped into Julian. “Have you…” he started. “Oh, the legal meaning of ‘equivalent’? Yes, all sorted. The car’s fine. Given the significance I took it up directly with the chairman, we thrashed it all out and in the very specific circumstances I concluded that the strict legal meaning of ‘equivalent’ is ‘whatever the chairman says it means’. Hope that doesn’t disappoint?”

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