John Davidson moved in-house for the first time in his 21-year career as a lawyer in 2006, but the only real change to his everyday life is that his office is now in Mayfair. Formerly a corporate partner at Lovells, Davidson was hired by brewing giant SABMiller to replace its retiring general counsel Andrew Tonkinson.
The appointment was a canny one by the company. Davidson’s relationship with it began in 1998 when South African company SAB plumped for the London Stock Exchange and carried out a primary listing. A beauty parade of potential advisers threw up Davidson and Lovells, and neither side looked back.
Davidson went on to advise SAB as it grew rapidly through acquisition, acting on deals such as the 2002 merger with US brewer Miller, which created the FTSE100 company that operates today.
Acquisition has been, and will continue to be, a key theme of SAB’s growth. During the summer, as Davidson was making the transfer from Lovells to in-house, he acted on deals as diverse as a $1.75bn ($904.57m) bond issue through to acquisitions, disposals and joint ventures.
“It’s a key part of the group’s strategy to grow through acquisition,” says Davidson. “The real challenge for the group globally is to keep up the position of second-largest brewer by volume.”
Like other large UK plcs, Davidson and SAB also have to abide by corporate governance rules and guidelines, such as the Combined Code on Corporate Governance. Davidson says the challenge for SAB is that the company cannot abide by every part of it due to the nature of its corporate structure.
“We’ve got the opportunity to explain why we don’t comply,” Davidson explains. “The investment authorities don’t regard the Combined Code as a box-ticking exercise.”
Following in the steps of Tonkinson before him, Davidson also sits on SAB’s executive board and acts as company secretary as well as general counsel.
“One of the attractions of the job was the broader scope, which does mean there’s less opportunity to be involved in the details of many of the deals,” he says.
However, Davidson concedes that there is the risk for the dual role of lawyer and board member to become confused.
“I think in any situation where you’re both in a business role and an advisory role, there’s a potential for conflict,” he admits. “You’ve got to recognise that and not be seduced by the dark side. Actually I think you’re better equipped to do the job properly because you’ve got so much more knowledge about the business.”
The SAB legal team is surprisingly lean given the size of the company, which turns over in excess of $15bn (£7.75bn). There are six lawyers in SAB’s corporate headquarters in London and there is always a trainee on a six-month secondment from Lovells. Although SAB is listed in London, it has barely any business in the UK, with most of the company’s operations elsewhere in the world.
Since joining the company Davidson has had many dealings with his former colleague Andrew Pearson, a partner at Lovells, who has taken over as SAB’s client relationship partner. The firm remains the company’s principal corporate adviser, although SAB also uses South African firm Werksmans and Richards Butler in Hong Kong.
Now that he is settled in at SAB, Davidson believes he made the right move at the right time.
“I never wanted to move from Lovells to another firm,” he says, saying that, like other City partners, he regularly received calls from headhunters seeking potential moves to US firms. “If you’ve got to make a change, making it when there are 10 or more years to do the job properly means the timing was pretty much optimal.”
He is now beginning to get to know his in-house colleagues in other organisations and recently went to his first meeting of FTSE100 in-house group the GC100.
“The opportunity to share experiences, to share issues, to discuss things with people who are in a similar situation is great,” Davidson says. “I think the way the GC100 has gone about protecting the interests of British businesses has been very positive. It’s been done in a low-key, responsible way.”
|General counsel and company secretary:||John Davidson|
|Reporting to:||Chief executive Graham Mackay|
|Main law firms:||Lovells, Richards Butler (Hong Kong), Werksmans (South Africa)|
|John Davidson’s CV||