“Corporate responsibility” is one of those essential phrases for the modern plc. It’s employed to demonstrate that the business is not merely some rapacious money-making machine, bulldozering everything in its path, but a caring, sharing organisation that, like the old dope pedlar, is just trying to do well by doing good.

Fund management businesses are not immune, since the Companies Act obliges them to comply, even if nobody quite knows what the expression means in this context. Here, for example, is Henderson Global Investors: “Responsible investment is the term Henderson uses to cover our work on environmental, social and corporate governance issues.”

This fine phrase isn’t going down too well in Winchester, where a Henderson associate company plans to develop a run-down slice of the city centre, and quite a few of the natives are revolting. This week the £165m project ground to a halt in the high court when Mrs Justice Lang ruled that the city council had acted unlawfully in accepting Henderson’s proposed changes, which degraded the scheme. Whether or not the development would enhance the ancient city – a shopaganza designed by a single architectural practice on a five-acre site near the cathedral doesn’t sound promising – the reputational risk to Henderson is substantial.

The profitable part of the fund management business is garnering the savings of thousands of individuals. They are spoilt for choice of manager, and after what looks like a display of greed with this scheme, it’s safe to say that few of the wealthier residents of Winchester will be looking to invest in Henderson funds.

This little local difficulty may not set the ripples spreading widely enough to cause the brand significant damage. It is, at least, a demonstration of how things are connected. It’s also Henderson’s chance to show a little corporate responsibility.

 It’s cash, but not in the bank

About those Swiss francs you’ve got (perfectly legitimately, of course). You really don’t want to deposit them or buy government bonds only to be charged for the privilege, so what do you do? Take them out in cash, put them into a fireproof safe deposit box or three, and trust that neither moth nor rust doth corrupt.

As bond yields turn negative, this strategy will become more popular, and not just in Switzerland. The bondwatchers at Bond Vigilantes have been trying to work out what it means as money crosses the “zero bound” into negative rates. For a start, the narrow money supply will rise (as it did, for different reasons, during the banking crisis) but since the cash won’t appear on the banks’ balance sheets, it’s neither spent nor available to borrowers.

The further below the zero bound that bond prices go, the bigger the incentive to simply hoard cash this way, and the less the banks have to lend, thus exacerbating the deflationary effect the authorities are trying to counter. As the vigilantes say: “In the extreme, you could even develop markets in exchange traded derivatives issues that are linked to cash held in a depository”. These derivatives could, presumably, be sold for cash, inventing a whole new proxy banking system. The cash, of course, would go into a fireproof safe deposit box…

The 1p coin should cop it

Find a penny, pick it up, and all day long you’ll have… a bad back. Perhaps that’s why these copper-coated steel slivers can lay undisturbed for days on pavements, or perhaps it’s because the coin has so little value that it’s not worth the bother of stooping. Its principal use is to keep shop assistants honest, as we wait for our receipt and change. Many of the 11.278bn minted pennies lurk unwanted down sofas and in drawers.

Now those shoppers who preferred to save a penny are to be denied the choice as Poundland prepares to swallow 99p Stores for a rather chunkier £55m. There have been calls for the deal to go to the competition authorities, but that does look rather silly. Other retailers are available, if not of Valentine’s Day fluffy red handcuffs (only, er, £1). If the authorities want to get involved, they might instead ask whether inflation has finally done for the 1p. It’s time to scrap it.


This is my FT column from Saturday (with apologies for late posting. Sheer incompetence)