RAILWAY MANAGEMENT

Evening Post, Volume CIX, Issue 25, 30 January 1930, Page 7

RAILWAY MANAGEMENT

THE BRITISH SYSTEM

TOO' MUCH INTERFERENCE

(From "The Port's" Representative.) LONDON, 12th December.

Sir Henry Thornton (president of the Canadian National Kailways), made what he termed a friendly criticism of British railways directors' "interference" with matters of detail. The host was Mr. E. B. M'lnerney, manager of the Koyal Bank of Canada.

Sir Henry, who was general manager o£ the Great Eastern Railway from 1914 to 1922, said: "I believe there is as much money to be made in England to-day as in any other country excepting possibly Canada. -If thiß country is to recover its industrial pre-eminence there will have to be an entire scrapping o£ commercial policies, methods, machinery, and appliances, to reduce costs of production, which means, among other things, the introduction of labour-saving devices.

"I offer, a friendly criticism with reepect to the organisation of your railway systems. The interference of directors with respect to details must be abandoned. The chief function of a board of directors is vigilance. That enterprise succeeds best which employs able officers and then leaves them severely alone so long as the Jesuits are satisfactory.

"The policy in your railway systems of establishing various committe«B of directorSj. which preside over and go into the details and minutiae of departmental operations, is ineffective, and, what is worse, encourages inefficiency, insubordination, and disloyalty. Quite naturally, the head of a department, who, theoretically and practically, should owe his first allegiance to his chief, frequently worships at the shrine of tire director who happens to be chairman of his particular departmental committee. The result is the establishment of little principalities called departments, jealous of their own rights and prerogatives, ignorant of the welfare of the whole. Such committees should be swept out of existence and the details of administration left to those who are paid for performing that service. "The functions of directors Bhould be limited to consultation and advice with the head of the company with respect to those large questions of policy with which they are supposedly able to deal. This is the theory upon which the larger systems of both the United States and Canada are administered. Thus far it has not only been found successful, but also there is no sacrifice of those things which affect the interests of the shareholders. What I have said with respect to railways applies equally to other large industrial enterprises. Sir Henry, referring to the highly successful policy on the Canadian National Railways of inviting and adopting suggestions from workpeople, said: I can foresee the daj when the entire staff will individually regard themselves as proprietors. In short, we shall have 90,000 men giving their brains to the company instead of merely their hands."