The Corporate Jolly

The London Paper – 13 Nov 2006

Like all Virgos I don’t really believe in star signs. However, last week I felt that my moon was definitely aligned in Uranus when a colleague’s sudden illness meant that I, and not he, went on a ‘corporate jolly’. This is an oft-used term generally describing trips to things like factories or power stations paid for by the companies that we are attempting to analyze with a view to increasing our knowledge of the companies’ prospects. Of course, they are invariably just a huge PR exercise but since they take me out of the office for a day or two and have huge comic potential I’m always first to volunteer myself. Furthermore, the companies generally ensure that these trips involve lavish hotels and expensive restaurants hoping that these inducements will ensure the participation of we pampered analysts. In the great words of Withnail: ‘Free to those that can afford it, very expensive to those that can’t’.

There are certain common features to all these trips. Firstly, on the site visit we analysts inevitably have the rather disturbing experience of meeting people with ‘real’ jobs in factories and so forth. Since most of us haven’t ever done anything with our hands other than click a mouse or swing a golf club we crowd around these people examining them as David Bellamy would some kind of strange arachnid. Usually, some smartass will ask this poor unfortunate difficult questions hoping that he will say something ‘off message’ and embarrass the executive that is present.

The other regularly amusing scene to witness is a ‘wunch of bankers’ from competing firms pretending to be pleasant to each-other for 24 hours. Whilst deeply held rivalries and long-standing hostility are masked for the first few hours, later on when the booze is flowing, true feelings rear their ugly head. Suddenly, thinly veiled insults and reminders of each other’s poor stock recommendations are being traded across the dining table. Sometimes the company’s senior managers find themselves acting like boxing referees desperate to placate the petty squabbles of some over-indulged idiots. Competing analysts are thrown into an even more vicious frenzy if there are clients (e.g. fund managers) present. To witness the fawning competitive arse-kissing that these characters receive from rival analysts, even if they have all the charm of Donald Rumsfeld on crack, is indeed a sight to behold.

These corporate jollies inevitably contain no new information that will influence our views of the companies involved. We analysts cynically view them as preposterous PR exercises and, in fact, see the lavish entertainment that is usually involved as symptomatic of a company’s poor cost control. Despite this, I have been on trips involving lear jets, helicopters and Michelin starred restaurants. It should come as no surprise to you that these expensive pointless trips are, of course, ultimately paid for by the companies’ shareholders, who are often pensioners. Long may they continue.

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