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Tesco - Very Little Seems to be Helping

25/06/2015 15:48 BST | Updated 24/06/2016 10:59 BST

How touching that troubled supermarket chain Tesco is still reportedly able to offer its ousted former boss Philip Clarke 10 per cent off his grocery bill for life.

It should certainly help stretch his pension, just £658,000 a year from the company which he left less healthy than when he took over. The £1.2 million termination fee for having to leave early (that tricky accounting scandal) will also be handy.

Meanwhile, of course, the good ship Tesco still appears lost in a sea of litigation, tumbling sales and tax investigations.

Comedy, it seems, is nowadays never far from the tragedy that the UK's biggest retailer has become as it grapples with the worst crises in its 96-year history.

Not that we should detract at all from the effort put into keeping one customer loyal for life. Mr Clarke, your former employer expects.

How much his regular shopping will help is unclear. But as Tesco is so fond of pointing out, every little helps; particularly, we might assume, after recording a £6.4 billion pre-tax loss for the year, one of the largest in corporate history.

When shareholders gather in the QE2 Conference Centre in Westminster on Friday for their annual general meeting, we should expect, and probably hope for, some serious fireworks. The arrangements for Mr Clarke may be the least of many explosive elements.

Mr Clarke is, of course, fully entitled to everything he is contractually owed ,and there is no suggestion of any impropriety in his rewards. But that does nothing to lessen the shock to outsiders from being reminded just how at odds his own fortunes are compared with those of the company he led.

Firms do lose their way for all sorts of reasons, but there is a whiff of hubris about the board not even expressing regret at such a vast payment to someone on whose watch disaster struck. Captains, ships and rocks spring to mind.

At a time when corporate remuneration generally is a source of shareholder friction, and as other professional grades in life battle to keep incomes as they were even five years ago, there is something jaw-dropping about this one.

Is revolution in the air on Friday? It could be in answer to the "let them eat cake," insouciance from the Tesco board, which might as well add, given the poor results: "And we don't even mind if it isn't our cake."

The problems facing Tesco, even as its new management battles traditional rivals and incursions by Aldi and Lidl, are deep and the sort that spook shareholders and investors in particular.

It seemed, and still does, quite extraordinary that Tesco could artificially inflate profits by £263 million. It remains an accounting scandal of monumental proportions, the sort that will fill text books for years to come.

The repercussions have not ended, either. The Serious Fraud Office is still investigating the company and shareholders are being encouraged to join in class action law suits.

There is talk of Tesco trying to negotiate for a deferred prosecution, which is a little similar to non-prosecution. Well, they would. But actually standards of corporate governance must not only be upheld, but seen to be.

The Tesco accounting problems must be thoroughly and publicly examined, and blame attributed if necessary. Above all, confidence in how firms produce their books must be unquestioned or the whole shareholding edifice of our economy is threatened.

Tesco was for many years a celebrated, expanding emblem of great British business success. But with that status also comes a responsibility to be an ambassador for good corporate governance.