1991, Anger over British Gas chairman Robert Evan’s 66% pay rise.
“Effective change leadership balances strategic vision with ethical awareness and robust governance, engaging stakeholders transparently and considering the broader context to navigate organisational change successfully”
👏 Happy Friday!
On this day, June 21, 1991, British Gas chairman Robert Evans faced intense criticism for accepting a substantial pay rise of 66%, catapulting his salary from £222,000 to £370,000. This event marked a pivotal moment in the ongoing debate about executive compensation and corporate governance in the United Kingdom. The controversy surrounding Robert Evans’ pay rise occurred against the backdrop of significant economic and political changes in Britain. British Gas had been privatised just five years earlier, in 1986, as part of Margaret Thatcher’s sweeping privatisation programme. This change from a state-owned enterprise to a publicly traded company was meant to increase efficiency and competitiveness. However, it also raised questions about accountability and the appropriate level of compensation for executives managing these newly privatised entities. Evans’ pay increase was particularly contentious given the economic climate of the early 1990s. The UK was experiencing a recession, with high unemployment rates and stagnant wages for many workers. Inflation was running at around 5.9% in 1991, making the 66% pay rise seem even more extravagant in comparison to the average worker’s experience. This disconnect between the executive’s compensation and the broader economic conditions risked creating the perception of a change management charade, a superficial performance of change without substance. The public outcry was immediate and intense. Trade unions, consumer groups, and politicians from across the political spectrum condemned the pay rise as excessive and insensitive. The Labour Party, then in opposition, used the incident to criticise the Conservative government’s privatisation policies and what they saw as a growing divide between executive pay and that of ordinary workers.
✅ At the time, Labour’s energy spokesman, Frank Dobson, said, “It is a symptom of corporate greed. They think that now there are no restrictions on them, they can do what they like.” Change leaders must have contextual awareness, understand the broader economic, social, and political environment, and anticipate how decisions may be perceived in light of prevailing conditions. They prioritise clear, honest, and proactive communication about the rationale behind significant decisions to build trust and mitigate negative reactions. Leaders of change develop comprehensive stakeholder maps and actively engage diverse groups to anticipate reactions and build support for organisational changes. They integrate ethical considerations into decision-making processes, particularly for sensitive issues like executive compensation, to maintain long-term credibility. Effective change leaders proactively establish robust governance structures, incorporating independent directors and ethics committees, to rigorously question assumptions and ensure that decisions harmonise with organisational values and stakeholder expectations. Change Leaders Must Have Contextual Awareness.
“Effective change leadership balances strategic vision with ethical awareness and robust governance, engaging stakeholders transparently and considering the broader context to navigate organisational change successfully”
👉 Contextual Awareness Change Charade: The concept of change management charade becomes particularly relevant in such scenarios. When leaders fail to grasp the full context of their decisions, they risk engaging in a superficial performance of change management, merely creating an appearance of change without substance. This disconnect can lead to resistance, scepticism, and ultimately, the failure of change initiatives. Effective change leadership requires a holistic approach that considers not only internal organisational dynamics but also external factors such as economic conditions, public sentiment, and political climate. By developing comprehensive stakeholder maps and actively engaging diverse groups, leaders can anticipate reactions and build support for organisational changes. This proactive stance helps prevent the perception of change management as a mere charade and instead fosters genuine transformation. Moreover, integrating ethical considerations into decision-making processes, particularly for sensitive issues like executive compensation, is crucial for maintaining long-term credibility. Establishing robust governance structures with independent oversight can help ensure that decisions align with organisational values and stakeholder expectations, avoiding the pitfalls of short-sighted actions that may undermine change efforts.
Final Thoughts:
Does your senior leadership team demonstrate true contextual awareness when implementing change, or are they involved in an absurd pretence, a change management charade, intended to create a pleasant or respectable appearance of change without addressing the underlying issues?
Further Reading: Change Management Charade - Leadership of Change Volume 8
Have a fantastic holiday weekend with the ones you love and care for, enjoy some fresh air, exercise, eat, drink and be happy.
Peter consults, speaks, and writes on the Leadership of Change®.
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Peter F Gallagher is a Change Management Global Thought Leader, Guru, Expert, International Speaker, Author and Leadership Alignment Coach.
Ranked #1 Change Management Global Thought Leader: Top 50 Global Thought Leaders and Influencers on Change Management (2024-2023-2022-2021-2020) by Thinkers360.
Listed #1 by leadersHum Top 40 Change Management Gurus You Should Follow in 2022 (Mar 2022).
Listed #15 in the “Top 30” for Global Gurus Leadership (2024) by Global Gurus.
Ranked #1 Business Strategy Global Thought Leader: Top 50 Global Thought Leaders and Influencers on Business Strategy (2022) by Thinkers360.
Ranked #6 Leadership Global Thought Leader: Top 50 Global Thought Leaders and Influencers on Leadership (April 2024) by Thinkers360.
Business Book Ranking
Change Management Behaviour - Leadership of Change® Volume 6, listed among the 50 Books from Thinkers360 Thought Leaders to read in 2022.
Change Management Adoption - Leadership of Change® Volume 5, listed among year-to-date’s (Jul 2021) most popular books on business and technology from Thinkers360 member thought leaders.
Change Management Handbook - Leadership of Change® Volume 3, listed among the 50 Business and Technology Books from Thinkers360 Thought Leaders to read in 2021.
Change Management Pocket Guide - Leadership of Change® Volume 2, ranked within the top 50 Business and Technology Books (Jan 2020) from Thinkers360 Thought Leaders.