In one of Aesop's fables a community of frogs choose a log as their first king. But they quickly bear off King Log and replace him with a stork. King Stork proceeds to devour all the frogs.
Jonathan Guinness uses this analogy to describe the decline of the Guinness family influence on the company which bears its name. King Log was Benjamin Guinness, Lord Iveagh, a decent but weak man who was chairman of Guinness. Iveagh suffered from a bowel inflammation and became an alcoholic. King Stork is Ernest Saunders, who can barely conceal his low opinion of Iveagh but wins the support of the Guinness family because he restores their fortunes.
Ernest Saunders was headhunted by the Guinness family in 1981. Jonathan Guinness, now Lord Moyne, reveals that the family was not well-connected in international business circles and the choice of Saunders, then a senior executive with Nestle, was almost haphazard.
Within a couple of years, Saunders had closed 150 ill-judged diversifications within the group and the Guinness share price had climbed from 50p to 300p. Little wonder the family was pleased with its choice.
Saunders the cost-cutter then became Saunders the empire-builder. He bought Bells whisky from its extremely reluctant management. He cultivated certain business journalists who came to believe he walked on water. Within months of buying Bells, he launched an ever more ambitious bid for the Distillers Co, a sleepy old giant of the Scotch whisky industry which bore a remarkable resemblance to the sleepy old giant of the brewing industry before Saunders took it in hand.
Jonathan Guinness relishes the irony of Distillers welcoming the approach from Guinness. It was facing a hostile bid from the Argyll Group, Scottish upstarts so far as the patrician directors of Distillers were concerned. How much more congenial, the directors thought, to be taken over by a like-minded company whose top people had been to good schools and could recognise a decent claret.
They did not realise Saunders had changed the culture of Guinness for good. They had invited a particularly scary cuckoo into the nest. The first sign of this was when Saunders insisted that Distillers should pay the costs of Guinness's bid should Guinness lose out to Argyll. In theory, this could have led to Argyll paying Guinness for no other reason than trying to frustrate them.
Saunders gave two undertakings to sweeten Scottish sensibilities. Distillers' head office would be moved from London to Edinburgh and a Scottish grandee would be named chairman. Saunders reneged on both commitments. He was to pay a stiff price.
When he was accused of rigging the market to make the Distillers bid succeed, Saunders was forced out by the executive directors and the Guinness family members who survived on the board. The new chairman was Sir Norman McFarlane, another Scottish grandee who now pursued Saunders with what even Jonathan Guinness describes as vindictiveness.
"Right or wrong," Guinness writes, "what he (Saunders) had done had been on the company's behalf. True, much that he ought to have reported to the board had not been so reported and much of that looked, prima facie, indefensible. That is why at the time none of us stood up for his right to be given his legal costs. It is only now, years later, that I begin to think that in this respect our behaviour did not reflect the best traditions of a company like Guinness." His view may also have been coloured by his own treatment at McFarlane's hands.
After a board meeting in 1987, Guinness recounts how the new chairman took him aside and said: "I notice you are only on £4,000 a year whereas the other non-executives get £10,000 . . . This is clearly most improper, and typical of Saunders. I'll get it put right."
At their next meeting, McFarlane gave him the sack. "You come up for re-election at the next annual meeting and I note you have been a director for 27 years. Perhaps you ought to stand down; I think the right term for a non-executive director is three years."
The recovery of Guinness from the Distillers scandal depended so much on McFarlane "that I kept alert for any sign of strain," writes Guinness. "I noticed it once only." This was at a dinner to mark the retirement of Edward Guinness as chairman of the Brewers' Society. Jonathan Guinness wondered how McFarlane would balance the inevitability of reference to the scandal with a decent tribute to the departing Guinness.
"McFarlane went on and on about the scandal, with only the most perfunctory references to Edward. He's made his point, I said to myself, now he's just banging on . . . However, this occasion was only a ceremonial one, and if this is the only criticism I have of McFarlane at such a difficult period, it is itself a tribute."
Do we hear the sound of damning with faint praise?
Requiem For A Family Business is published by Macmillan (£20 in UK)