Seven rules that firms must follow when they are engulfed in scandal

What should companies learn from the Thomas Cook fiasco? Peter Fankhauser, chief executive of the travel company since 2014, has finally met the parents of Bobby and Christi Shepherd, the children who died in 2006, and apologised.

The row that has engulfed the company could have been defused had it acted faster and more sensibly earlier on. Fankhauser now realises that. To his credit, he admitted that “this is a meeting which should have happened when I first took over as CEO ... and frankly something Thomas Cook should have done nine years ago”.

So here are a few rules. First, when things goes wrong, as they inevitably will at some point, don’t hide behind lawyers. Put your hand up and apologise. Do it quickly and be personal. The CEO needs to get involved and show genuine contrition. Empathy and good manners are a key requirement for the modern company boss, especially in consumer-facing industries.

Second, companies are often bitten badly by old scandals, accidents or rows that happened under a previous management but that subsequently re-emerge years later. Many banks have been through this repeatedly, for example. It doesn’t matter: the public will never understand the difference. The new CEO should apologise on behalf of the company, not assume that this isn’t his or her problem any longer. Companies are legal entities that exist separately from their staff and owners. So if it doesn’t feel fair to current managers that they are having to apologise for something they had no role in, they clearly don’t understand the nature of the organisation they work for and are in the wrong job.

Third, you must never, ever be seen to have benefited from a tragedy. Hand over any money you extract from court cases - make sure the actual families are the beneficiaries, and not some random charity. More prosaically, handing out cash is cheaper than risking large-scale reputational damage.

^{Bobby and Christi Shepherd, who died in 2006}

Fourth, put in place new procedures to reduce the risk of a tragedy or accident from happening again, and publicise this extensively. Keep revisiting these structures and strategy: complacency has a nasty habit of creeping back in.

Fifth, stamp out rewards for failure - there is nothing the public hates more - and sack anybody who behaved stupidly or recklessly.

Sixth, hire advisers that understand this, and listen to them.

Seven, remember that every organisation eventually gets embroiled in a row or suffers an accident at some point. It’s a statistical reality even in the best run of institutions. So always prepare for the worst, and make sure you are ready to act speedily to nip any developing storm in the bud.

Emigration: the real problem

Many people are worried about immigration. I’m more concerned about emigration: attracting people here, by and large, is a sign that our economy is doing well. But losing folk, however, can mean that we are getting things wrong: the last thing we need, as an economy, would be for the best and brightest graduates to leave the country, chased away by excessive house prices, insufficient jobs of the right kind or other quality of life factors.

This doesn’t mean that all emigration is bad, of course: often, it is a case of people who moved here temporarily to work or study returning home. It may also reflect pensioners retiring to warmer climes. In a globalised economy, it is a great thing if large numbers of talented and hard-working Brits work abroad for a few years, gaining international experience before returning. Ditto university students. Last but not least, this is a free country, and people are perfectly entitled to emigrate for whatever reason they choose.

But in many cases people leave because they feel that their lives here in Britain aren’t good enough: they are tired of the high taxes, or lack of modern, spacious homes for families, or the creaking infrastructure.

The latest statistics from the Office for National Statistics should therefore be of concern to economists, policymakers and businesses: they show that 323,000 people emigrated last year, of which 139,000 were British. The statistics are insufficiently granular to allow us to draw too many conclusions from them as to what share of emigration was for negative reasons and what was driven by positive ones. But 56pc or so of emigrants cite work reasons as the reason they are moving abroad. It is fashionable, if inaccurate, to describe our challenge as being akin to an economic global race. Policymakers can’t do anything about the British weather, but too many people are still leaving the country for comfort.

Enoc bids for Dragon

Good news for investors, bankers and supporters of globalisation. Dubai’s Emirates National Oil Company (Enoc) is trying to buy the 46pc of Dragon Oil it doesn’t own at 735p a share, valuing the business at £3.6bn. It’s a decent premium: even after jumping almost 6pc on Thursday, the share price closed at 683.47p. If I were a shareholder in the business, I would take the cash, though of course that would - in part - be a bet on oil prices not rocketing too soon.

This deal also reminds us just how globalised the London markets have become, and that we would be mad to turn our backs on overseas capital and investors. We need even more companies to list in London, and even more financial activity to take place here. Banks that have broken the rules must pay a severe price in terms of hefty fines: but these must be proportionate and determined according to a logical process, not be random or arbitrary. The reduction in liquidity across the financial system is deeply concerning.

As to the UK’s membership of the EU, an essential plank of David Cameron’s renegotiation of its terms must include safeguarding the City’s access to European markets. As the talks progress, we will hear a lot more about something called passporting rights: they are the rules that allow financial firms to conduct business anywhere across the European Economic Area under a single market directive. Crucially, EU membership is not required for this, but being part of the single market is. Were we to leave all existing structures, it would be imperative for the UK to retain this access through a different, negotiated settlement. When it comes to the City and finance, passporting is the buzzword of the moment.

allister.heath@telegraph.co.uk