Survey Of Scottish Captains Of Industry 1998

Scottish Council Foundation

Every year MORI surveys UK 'captains of industry' - chairmen, directors and chief executives - for their views on the economy and prospects for the future. This year the Scottish Council Foundation has commissioned MORI Scotland to conduct the same survey with Scottish 'captains of industry'.

Differences between UK and Scotland

The results, revealed here for the first time, show a number of differences between the attitudes and opinions of UK and Scottish captains of industry. Scotland's business leaders are, for example, more optimistic about the economic outlook, more concerned about the strong pound, more enthusiastic about the single currency, and more likely to report that they are fulfilling their obligations to the wider community.

Devolution

The Scottish survey asked a number of questions about devolution, revealing that business opinion in advance of the May elections is lukewarm; that business expect the politicians, rather than themselves, to make devolution work; and that the balance of opinion is that devolution will make little difference to Scotland's economic prospects.

Scottish Values: Conference

The findings from this survey, especially as they reveal a business culture in Scotland distinct from the rest of the UK, will be discussed at the Foundation's sellout one-day conference on Tuesday 20 October on Scottish Values and the Scottish Economy. Minister for Business and Industry Lord Macdonald will be the keynote speaker.

The survey findings are summarised below. The full data are available on request from Claudette at Hobsbawm Macaulay Communications, t: 0131-447 8440.

Headline Findings

Single Currency

• Scottish business leaders strongly favour Britain's participation in a single currency, believing that the Euro will have significant economic benefits for EU members states. Support for the single currency remains higher than in the rest of the UK (although MORI records significant growth there in recent years).

Devolution

Scottish business leaders:

• Have relatively low expectations of positive benefits from devolution. Around one quarter expect an improved environment for business and a number refer to advantages from stronger identity and local decision-making. One in ten said devolution will make no difference.
• Are evenly divided on whether the greater focus on Scotland arising from devolution will prove to be a business asset: 47% expect that it will not compared with 44% who believe that it will.
• Repeat some of the concerns voiced at the time of the referendum. Around one-third expect increased taxation and less 'clout' internationally/ marginalisation, and one quarter more bureaucracy/red tape. A small number expect costs to rise, and a loss of funding or expert support from Westminster.
• But the 'devolution scares' of the past are not echoed in the survey with much conviction. No factor stands out as clearly positive or negative for the majority of respondents.
• Believe the main responsibility for making devolution work for Scotland lies with elected politicians, either in the Scottish Parliament (43%), Westminster (27%) or in the hands of the Secretary of State (13%). Only one in five thought business leaders were responsible for making the new system work, and only one in ten mentioned the public, whose votes will determine the make-up of Holyrood.

Economic Prospects

Scottish Captains of Industry are:

• Pessimistic about economic prospects in Britain and in Scotland over the coming year. Three-quarters expect conditions to worsen and one-quarter to stay the same. But they are less pessimistic than other UK business leaders who have recorded a rapid and steep fall-off in optimism: half of other UK business leaders expected the economy to improve as recently as last year, but none expect improvement over the next twelve months.
• More optimistic when asked about prospects for their own company. As many as half expect their own business to improve. About one-third make the same assessment in the rest of the UK although that too is a sharp drop from last year's poll when two-thirds expected improvement.
• Optimistic on balance about Scotland's ability to compete internationally in 2004: 47% agreed and 27% disagreed that Scotland will be better equipped, but one in four were unable to decide, reflecting uncertainty about the next five years.

Business environment

We asked business leaders to identify the most important problems currently facing them.

• The strong pound was the top-ranked concern with more than one-third of Scottish business leaders mentioning it, compared with one in six in the rest of the UK (among whom concern appears to be falling). Scots are significantly more likely to mention interest rates but much less likely to mention the general economic climate which is the top concern in the rest of the UK. Scottish leaders are more likely to identify external features (like competition) as the biggest challenges to company growth and less likely to mention factors that depend more upon their own decisions - such as adapting to change or improving the quality of management.

We also asked them about the important factors they take into account when judging other companies.

• Scottish Captains are more likely to refer to financial performance and stability. They rank this ahead of quality of management by some distance, while quality of management is consistently the most common attribute mentioned in the rest of the UK. Scots are less likely to mention the quality of products/services or honesty/integrity than their counterparts south of the border and make no reference at all to how customers or employees are treated (among the key features of the 'stakeholder company' identified by Tony Blair soon after becoming leader of the Labour Party and both featuring as factors identified by UK captains). Scots also referred to familiar business values likes 'stability' and 'reliability', which found less echo in the rest of the UK.

Corporate responsibility

• Two thirds of Scottish business leaders do not agree that creating more jobs is the most effective step to demonstrate their social responsibilities. Given the Government's stress on employer commitment to the New Deal, and its belief that 'the best social policy is a job', this suggests a clear gap in perceptions of how companies can best fulfil their responsibilities to society.
• By a small margin Scottish leaders believe that businesses do pay enough attention to their social responsibilities. This compares with other UK Captains of Industry, who think that business does not do enough (also by a small margin). This marks a sharp growth in that sentiment in the rest of the UK, coinciding with election of a government speaking the language of responsible business.
• There is a gulf in perception between business and public opinion across the UK. The public thinks that companies do not do enough to meet their social responsibilities, Scots about 10% more than the British average. The gap between business and public opinion is 40% in Scotland and 27% in the rest of the UK. Scots tend to expect more of business by way of corporate responsibility, and to be more disappointed with actual performance than in the UK as a whole.
• Scottish business leaders were divided about companies' treatment of the environment, with marginally fewer agreeing that enough is done than disagreeing. In contrast there is a trend in the rest of the UK for more of their counterparts to agree that companies could take more responsibility. Business leaders in Scotland take a different view from the rest of the UK on these measures of responsibility and are generally more convinced that business is doing enough to satisfy its corporate responsibilities. This could reflect better performance by Scottish companies, greater complacency about corporate responsibility or other factors.

Technical details

This summary is based on a MORI survey of 30 Captains of Industry in Scotland. The fieldwork took place between 15-29 September 1998. Comparative results are based on two other MORI surveys: of 69 Captains of Industry in the rest of the UK; and of public opinion on Corporate Social Responsibility, conducted in July-August 1998, based on 1935 interviews including 174 in Scotland.