It's quite possible that an executive who underclaims is just lazy and disorganised, and one who claims for everything has valuable attention to detail, writes LUCY KELLAWAY.
TWICE IN the past few weeks senior business people have taken it upon themselves to tell me how modest their expense claims are. Each assured me there were all sorts of things they were perfectly entitled to claim for that they chose to finance out of their own pockets.
The conclusion I was meant to draw was that they were fine, upstanding people and great role models in business. The conclusion I actually drew was that they were part of a tiresome fashion in Britain: claiming that you are underclaiming. Last week, Barclaycard published a survey saying that executives routinely underclaim on business travel, and that the more senior you are, the less you claim. The average chairman underclaims £719 a year, apparently.
Does this mean that in business, as opposed to politics, there is no titillating story on expenses? That business people are better people than parliamentarians?
It means nothing of the sort. The expense accounts of executives are fascinating documents, though what story they tell can be devilishly hard to work out.
Let us suppose that all company directors’ expense forms were made public. This could well happen: British MPs are going to have to tell the taxpayer how they are spending their money; the head of the BBC has said he will let licence payers inspect every cab ride he took at their expense; and so I don’t see why shareholders should not start demanding that business leaders do the same.
At a stroke, we would know who was profligate with company money and who was parsimonious. Yet this alone would not be terribly useful. People who take customers to McDonald’s may be losing goodwill faster than they are saving money. Someone who has a clutch of bills from the Savoy Grill may be investing wisely – or not. One would need to have been a fly on the table to find out.
It would also tell us who claims for every last Tube fare and cup of tea. But even this is double-edged. It could be a sign of pettiness; equally it could betray a commendable attention to detail.
Transparency on expenses would tell us which business leaders were paying their business costs themselves. But even here there are four possible stories that could explain such behaviour: they are rich; they are stupid; they are morally upstanding; they are lazy and chaotic.
In my own case, option four applies. In more than two years as a non-executive director I have not managed to submit a single expense claim. It’s not that I don’t want the money, it’s just that it took me a long time to get the right expenses form and by the time I got it I had lost the receipts. By the time I found the receipts, I had lost the form. When I finally got both together I carried them round in my bag until that was stolen, so I’m back to square one.
Full disclosure would also help spot the people who are on the fiddle. One might think that there was only one story to tell here: anyone who pads expenses is a thief. Small deceits lead to big ones so any employee who fiddles is not someone one would employ.
I don’t accept this either. If one ruled out everyone who pads expenses, there would be a depleted pool of employees to choose from. There is bad fiddling – like when you get the company to pay for an operation for your pet dog – and there is okay fiddling. The person who takes a cab home on the grounds that they’ve slogged their guts out all day and are quite shattered, and then pretends it was a ride to a business meeting, is someone I’d be quite happy to employ. Just because you have put in a fraudulent taxi ride one minute does not mean you are Conrad Black the next.
The reason it is so difficult to generalise about expenses is that each company has its own moral code and each individual has his or her understanding of how to interpret that code. Take this example. My husband is the founder of Prospect, a current affairs magazine, and on his birthday one of his underlings bought him a CD of Leonard Cohen’s greatest hits. My husband was touched, though rather less so when he found that the £11.99 cost of the CD had been put on expenses.
You could say this was as outrageous as the MP who claimed a £5 church donation. Or you could argue that the gift was a legitimate business expense because it was intended to increase bonding. The real thing to be gained from making expenses transparent isn’t the insight into character that it would offer, because this is too hard to decipher. It’s the delicious triviality of us all.
The expenses claim I have most enjoyed reading about in the past few weeks was submitted by Kim Philby in 1940. The spy had lost his possessions in France and put in a claim to the Times, where he was working, for 20 items, including “shirts, ties, socks, links, studs, etc, hat, pigskin gloves, pair shoes, dressing gown (worn) . . . Royal noiseless portable typewriter (good condition), Parker pen and pen in case (new) . . . slippers, scarves, toilet accessories, thermos flasks, maps, mapcase”.
He claimed £100 16s 0d, and explained: “I have been able to give the exact cost price in only seven of the items listed, and have estimated the rest on the basis of the Army and Navy Stores catalogue.”
I don’t care whether he was bending the rules, and I don’t know what it tells me about Philby. The delight is in the detail.
