Sir Martin Sorrell urges corporate giants to spend £2.58tn cash mountain
Sir Martin Sorrell has spoken out against the overly conservative boards of Britain’s top companies, urging them to invest an estimated £2.58tn in cash reserves rather than continue hoarding it.
Speaking to an audience of technology, media and telecoms executives Sorrell warned that boards were being much too cautious and needed to start looking to the long term.
He said: “We’ve never recovered from Lehman and 2008. Don’t underestimate the significance of that weekend on corporate thinking. Corporates have become terribly conservative. They’re sitting on £2.58 trillion in cash and relatively unleveraged balance sheets.
“People say there is a lot of M&A activity but I question that. I wonder how much of it is real and how much of it is people noodling and thinking about things.
Blaming this trend on the declining relative importance of marketing Sorrell added: “The power of finance and procurement is too strong. I’m obviously biased… but the power has shifted and we see marketing have less and less power.”
2014 was expected to bring significant M&A activity but has so far disappointed after an expected AT&T bid for Vodafone was put on hold and EE scrapped plans to embark on an IPO.