The drive to make more money is the engine of capitalism. A momentary blip on the graph cannot bring the entire market economy into question. Of course, plain common sense and decency does demand that, within industry, high salaries be coupled to commensurately high achievements.
British newspapers are screaming blue murder as news leaks out of the extravagant 300.000 pound parties thrown last week by the Royal Bank of Scotland and HBOS for their executives. The celebration of their ‘successes’ over the last year, despite the 32 billion pounds of taxpayer’s money the two institutions together received in a government bailout just last month, is symptomatic of the real gap existing between the front and behind the counter at banks in general.
Coming after the scandalised public reaction to the infamous banker’s bonuses, this story will only strengthen the case for government caps on executive salaries in failing concerns, and high time too. It would be wrong however to perceive these highly paid and spoiled executives as the root of all evil. Indeed one could argue that without them the world would be a poorer place. Literally!
Members of the boards in the diamond bourses and federations are neither overpaid nor unduly extravagant with their organisations’ money; an invitation to participate in the IDMA Shanghai conference even stipulated that I pay my own travel and accommodation. The boards and committees of practically all the diamond bourses consist of unsalaried men who do not get paid at all.
With their own businesses to run, their own agendas and as often as not their own axes to grind, it is hardly surprising really that the interests of the wider market, not to mention the weaker players on the field, do not feature highly on the daily agenda., One wonders whether it is not time to replace these elected bodies, apparently incapable of turning a profit even from the snack bars in their own buildings. At the very least it might be time to swell their ranks with professional executives who have proven skills and track records.
Since De Beers wisely, if reluctantly, relinquished their leadership mantle and set its course for pastures new with their exclusive Forevermark, the diamond industry’s only leadership is these committees and federations, leaving the market unmanaged, rudderless and confused. Even once the need for new leadership is universally recognised within the industry, and the noises being made by De Beers, Alrosa and even Dilip Mehta are encouraging. it will take time and resources before any other organisation develops the ability and the clout to assume the leadership role De Beers used to fulfil.
The AWDC, whose charter dedicates them to supporting the entire diamond industry in Antwerp, do have a professional executive who are currently busy fighting a heroic, if probably doomed, campaign to protect the already stricken large traders from over-zealous policing. They have displayed a certain amount of interest in supporting industry initiatives. However lack of support from their elected (read unpaid) board has meant these projects tend to get shunted into a siding when issues of greater immediate concern to them arise.
De Beers, on the other hand, is a commercial organisation whose executives are patently and acutely aware their continued employment depends upon their turning ever larger profits. They are letting no grass grow under their plan to transfer their accumulated name recognition and goodwill (if you can call it that) from the best part of the 20th century into their new Forevermark brand.
A peek into their newly launched consumer website confirms all my predictions. With their hallmark slick advertising and terse pronouncements they are predictably throwing all their accumulated might into convincing the hapless consumer that a ‘Forevermark diamond’, is superior in every possible way.
With non-Forevermark manufacturer goods effectively demoted to second rate by the very firm that until recently supplied them, the crisis of leadership must be apparent and acute, to all but the schleppers, whistling ‘If I was a rich man,’ while Antwerp burns...
Next issue I will be taking a closer look at the new forevermark strategy, De Beers' continuing leadership role and the effects these might have on the market.