Profile: Investor puts his mouth where his money is: Alister Ross Goobey - Patrick Hosking finds that the boss of PosTel has lost none of his zeal to bring discipline to the boardroom (CORRECTED)

CORRECTION (PUBLISHED 20 FEBRUARY 1994) APPENDED TO THIS ARTICLE

HE LOOKS every inch the 19th- century Nonconformist preacher. Tall and severe with lanky, unfashionably parted hair and long sideburns, Alastair Ross Goobey has the perfect appearance to decry the evils of boardroom greed.

Nine months ago he wrote to the chairmen of the 100 biggest UK companies asking them to scrap long-term rolling contracts, which can lead to incompetent managers getting huge pay-offs.

It was as close as the normally invisible fund management industry ever comes to a fire-and-brimstone sermon. And Ross Goobey, the newly arrived head of PosTel, the biggest and pushiest pension fund in the land, was ideally placed to deliver it.

Then came a setback - one which showed the preacher with trousers round his ankles. It turned out that the Cheltenham & Gloucester Building Society, where he is a non-executive director, had its top executives on five-year rolling contracts - an extreme example of the menace Ross Goobey was trying to stamp out.

Things then went rather quiet on the corporate governance front. But Ross Goobey insists he has not backtracked on his campaign to curb boardroom excess. He says his infamous letter gave companies 12 months to put their houses in order. 'We haven't stopped talking to people about the subject of rolling contracts and remuneration packages. And from May onwards we will be revisiting the question.' As for the C&G, he says: 'I've given myself a year in which to change those contracts and try and persuade my colleagues to agree to that change.'

Some corporations have started to clean themselves up since Ross Goobey began his campaign. Enterprise Oil has shortened its top contracts. So has GEC. Sir Colin Marshall of BA has gone from three years to two years. Fourteen Footsie companies now have no rolling contracts longer than 12 months, he says.

However, that still leaves 86 that do. And questionable boardroom practices still appear rife. Last month Cedric Scroggs left Fisons with a pay-off thought to be around pounds 300,000. Two weeks ago Glaxo went back on its promise to split the roles of chairman and chief executive, giving both jobs to Richard Sykes.

Even so, Ross Goobey, 48, insists much is going on behind the scenes. 'There is a point when going public can be useful. But those occasions are very rare . . . It doesn't mean nothing's been happening.'

He sounds like a rather cautious civil servant, but the severe features and measured tones conceal a man with a sense of fun, one who relishes the limelight. Ever since playing Rosencrantz in a student production of Hamlet - cast as the serving wench in the same production was his future wife, Sarah - he has eagerly sought a public stage.

He is only too happy to be quoted as an investment 'guru' in the tabloids, and he regularly appears on Radio 4's business quiz show, The Board Game, alongside Nigel Whittaker of Kingfisher. As 'investment strategist' for the stockbroker James Capel in the 1980s, his job was to come up with pithy soundbites on the economy for the television news.

PosTel manages pounds 25bn on behalf of the British Telecom and Post Office pension funds, and it owns about 1 1/2 per cent of all quoted companies. Unlike most fund managers, it can afford to rock the boat; it only has two clients and does not want any more.

Ross Goobey's reputation for volubility is more a function of the monastic silence pursued by his peers. He has rarely uttered criticisms that others would not agree with privately.

He is a highly political animal. He stood as the Conservative candidate for West Leicester in the 1979 general election and lost, putting him in good company with Winston Churchill and Ramsay MacDonald. He later served brief spells as political adviser to two chancellors: Nigel Lawson in 1985- 87 and Norman Lamont in 1991. With his strong City connections, he was able to keep the Treasury informed on thinking in the financial markets.

He defends his public stance: 'There is a point when, if the company tells you it's none of your business, you have to gather support for your view amongst other shareholders, and ultimately you may have to go public on it. The media can be useful in getting a point of view across to other shareholders, maybe small shareholders and institutions who may not be aware of what is happening, and getting a groundswell of opinion to put more pressure on management.'

He points to Alan Sugar's questionable and abortive buyout offer for Amstrad. 'Going public on that did, I think, alert some of the small shareholders.' Similarly with his intervention in Pegasus, the accounting software company, where he helped engineer a boardroom coup. And it was Ross Goobey who last year launched a rescue bid for Greycoat, the troubled property group - highly unorthodox behaviour for an institutional investor.

The bid ultimately failed, and was considered by some to have been badly structured and unfair to preference shareholders. But it flushed out another offer from two South African investors, Julian Treger and Brian Myerson.

One City figure says: 'He was bloody hypocritical over Greycoat, on the one hand banging on about pre-emptive shareholder rights, on the other proposing issuing shares to PosTel at a discount to the market.'

Ross Goobey rejects the criticism: 'We were delighted with the outcome. Without our intervention last spring Greycoat would have been broke by now. Because we were in talks with them from March onwards, they were able to persuade their bankers not to foreclose on them. By the time of October, the property market had turned dramatically, I would say vindicating our judgement.

'It was important to us to establish the reputation for not being bullied and greenmailed into changing the terms that we'd agreed. It was others who decided to put other terms. I'm delighted the company is now on an even keel.'

Ross Goobey's love of property is well known. He wrote a book on the subject, Bricks and Mortals, and PosTel is overweight in the sector. It has 12-13 per cent of its portfolio invested in actual property, compared to an average of around 5-6 per cent. That has led to it underperforming in recent years, but looks likely to ensure it beats most rivals this year.

He was born in London just after the Second World War and brought up in Somerset. After public school (Marlborough), he read economics at Cambridge and achieved an unexceptional 2.2. Most of his energies went into music and drama: he was a member of Footlights, appearing in the 1968 Revue with Julie Covington. Clive James was another contemporary and Ross Goobey played the clarinet at his wedding.

Despite his flirtation with the luvvies, Ross Goobey joined Kleinwort Benson as a graduate trainee. 'I'm an actor manque, musician manque, everything manque,' he jokes. But he was always heading for the City; his father is George Ross Goobey, the former manager of the Imperial Tobacco pension fund.

Ross Goobey Snr, a domineering financial figure in the 1950s and 1960s, single-handedly forged the cult of equity. His pioneering switch from fixed-interest securities to equities had a profound impact on City thinking.

His son absorbed the excitement: 'As long as I can remember I've been exposed to the FT and financial markets. I remember always the great enthusiasm with which my father used to come home from work - bubbling with the things he was involved in. I used to think it couldn't be such a bad job if you could maintain such enthusiasm for it.'

After Kleinwort he joined Hume Holdings, a small merchant bank, weathered the secondary banking crisis and then in 1977 went on to run the Courtaulds pension fund. After his failure at the polls he joined Geoffrey Morley and Partners, the fund management boutique, but left after a disagreement on strategy. Then came his spell at James Capel.

A bright, intellectual man, he can occasionally appear immodest. In his introduction to Bricks and Mortals he quoted Disraeli to explain why he had written it: 'When I want to read a good book, I write one.'

Even so, his forecasts have not always proved accurate. 'Buying bonds today is a very bad bet, though I am sure we will all do it,' he told a James Capel investment seminar a year ago. In fact 1993 proved to be one of the best years for bonds this century.

You can't win them all.

CORRECTION

In our profile of Alastair Ross Goobey of 30 January, we reported that Glaxo had gone back on its promise to split the roles of chairman and chief executive. This was incorrect. We meant Wellcome, not Glaxo, which does split the jobs. We apologise for the error.

(Photograph omitted)