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Welcome to The Boardroom Path, the essential podcast for aspiring and newly appointed Non-Executive Directors navigating the journey from executive leadership to the boardroom. Hosted by Ralph Grayson, partner at Sainty Hird & Partners, each episode offers insightful conversations with industry leaders, seasoned board directors, and governance experts. Our guests share practical strategies, valuable perspectives, and actionable advice on how to effectively transition into board roles, maximise your impact, and build a rewarding NED career.
[00:00:03] Ralph Grayson: Welcome to The Boardroom Path by Sainty Hird & Partners. I'm your host, Ralph Grayson, a partner in the board practice. In this series, we'll offer practical steps and useful perspectives for aspiring and newly appointed NEDs. Throughout its 30 year history, Sainty Hird has recruited senior board members across the City, Industry, the Public Sector and NGOs.
We're now also evaluating those boards, as well as coaching and mentoring those seeking to transition from an executive career into the boardroom. So we'll be speaking to some leading figures in the board advisory and NED world. Specifically, we'll seek their counsel about how and where to spend time and energy to make an effective transition into the boardroom.
The goal is to equip recent and aspiring NEDs with tips, tactics and strategies to be most effective and build a successful career as a board director. In the process, we aim to help you to think more about who you are, how you operate and how you can make this work in the boardroom.
My guest today is Charles Myers, chairman and founder of Signum Global Advisors, who is a distinguished geopolitical strategist. He bridges the realms of global finance and high stakes politics. Formerly the Vice Chairman of Evercore ISI and Global Head of Equities at Fox-Pitt Kelton, he combines institutional leadership with strategic foresight. With three decades of financial markets experience and over 25 years advising political campaigns, including those of Hillary Clinton in 2016 and Joe Biden in 2020, Charles leads Signum in guiding institutional and corporate clients through evolving geopolitical and policy landscapes. His advice is sought by the boards of the major companies across the world, and so I'm honored and delighted to have captured his time and attention whilst on one of his diary packed trips to London.
Charles, good morning and thank you so much for joining us.
[00:02:09] Charles Myers: Great, good morning. Thanks for having me.
[00:02:11] Ralph Grayson: Charles, perhaps you can just give some more color to that brief introduction. Perhaps touch on your founding of Signum and the platform and your path into multiple boardrooms as an advisor to so many companies here in the UK and in the US.
[00:02:25] Charles Myers: yeah, absolutely. So, you know, I started Signum seven years ago after 27 years on the sell side doing global cash equities. Outside of my day job though, I've been very involved in democratic politics for 30 years. Including, as you mentioned, Joe Biden for President, Hillary Clinton for President, Kamala Harris for President. But seven years ago, I left the sell side because I really wanted to focus on the big volatility events that were even back then happening more frequently, both macro and geopolitical volatility events.
When I set up the firm, we had no idea seven years ago that, you know, in the subsequent years we would have a global pandemic that would kill millions, that Russia would invade Ukraine, Israel would be attacked and my favorite topic, President Trump, is back. So, you know, it's been an incredible seven year ride. We are now 25 partners in seven offices around the world. About 270 paying clients, ranging from multinationals across all sectors, as well as some of the biggest asset managers in the world.
So it's been an incredible journey. Geopolitical risk, when we started the firm was a top five risk. Today it's the number one risk in the world.
[00:03:32] Ralph Grayson: Yeah, and we're going to come to that into some detail this morning. I can't wait to peel back some of this and get your insights into what the hell is going on out there. You kindly spoke at our annual dinner a couple of years ago and ithad fantastic reviews. I'm super excited to have this conversation again now and brings us up to date.
You are in London, I think, for a conference which you held yesterday and titled Where Next for the EU after the US Trade Agreement. I believe that explored a number of themes, including how should the EU respond to Trump's trade policy, balancing economic pressure from both the US and China, progress we've had in EU and UK negotiations and where that leads for future colLabouration.
Could you give us some perspective on the conversation in the room?
[00:04:20] Charles Myers: Yeah, look, it was quite tense as you can imagine, because the reality is that the US-EU relationship, I would argue, is at a probably 20 year low.You know, the tension in the bilateral is playing out most visibly in the trade area where President Trump has come down almost, you know, unilaterally and forced the EU to accept a trade deal or a trade framework that, again, relative to maybe where people thought they would land, was okay.
But the truth is it's a pretty tough deal and quite expensive for Europe. In a way, the bigger issue is the way that it was handled. Which was again, kind of just unilaterally forced and I think there is a, you know, pretty valid consensus view that the EU capitulated or rolled over pretty quickly.
I say that without trying to sound offensive, but it's just a fact andthe reason for it, just quickly, as I understand it, was the EU didn't want to get into an escalating trade tension, let alone worse a trade war, which was quite possible with Trump.
So, trade certainly is a point of tension.
The other of course, is national security or defense. The United States is forcing Europe to spend a lot more on its own defense, and while every President going all the way back to JFK, has wanted Europe to spend more on its defense, President Trump in his sort of usual style has used a sledgehammer and the messaging around it also, I think has been,perhaps not as well received in Europe, whether it's the President, the Vice-President, JD Vance, or even our defense secretary, Pete Hegseth. But the truth is, on this issue, if I can just quickly to say I agree with, I mean, I think President Trump is right.
The United States has spent trillions and trillions of dollars for over 40 years providing a security umbrella, not only for Europe, but for all NATO members. But again, while we have spent all that money and all those resources, our allies have had really unprecedented luxury of instead investing hundreds of billions of dollars in their own domestic priorities. So I think, you know, President Trump is right on this againthe message and the way of conveying that perhaps is questionable.
Last quick point though. There's a very practical reason that the US wants Europe to spend more on its own defense. Which is the truth is Europe is not prepared for war. If, God forbid, we have World War III tomorrow, Europe is a sitting duck. Europe has got to be prepared for war, and there are only three countries in the world today that are prepared for war. The United States, Israel, and Russia.
I would say China's not even probably ready, but Europe is certainly not prepared. So, just those two issues alone, as well as some of our immigration policies, I think have really exacerbated tension between the US and the EU and I think we're probably at a trough, maybe it gets a bit better from here, but we're at least a 15-20 year low.
[00:07:03] Ralph Grayson: Can we dig deeper maybe into what that means for a UK board member listening to this podcast? It seems to me that what's resonating inside America seems very different to what's resonating inside Germany orcontinental Europe. Which is very different to what's resonating inside the UK at the moment.
So whether that's Trump has to be taken literally, or seriously, or both. Consensus seems to be with Trump, you must plan for it to happen and then expect it may not. So how the hell does anybody plan for anything in this world?
[00:07:37] Charles Myers: Yeah, no, it's a great question, and I think, for boards if they're sitting in the UK especially, I would say there's actually a huge advantage that the UK enjoys today. Meaning now that Brexit has happened, the UK can very uniquely actually engage with both the EU as well as the United States, and try to get the best of both in those bilaterals, in those relationships.
I liken it a little bit to Singapore in a way. Singapore has done a terrific job of being able to play the United States and China. I always say if you go to Washington, everyone will say, you know, Singapore, very important ally. If you go to Beijing, they'll say Singapore, very important ally. Singapore has really played this incredibly well. Being able to get the best from both the US and China. I think the UK similarly is in a really unique position to get the best from Europe and then also from the US. So I think,UK is very well positioned. Lastly, President Trump, you know, loves the United Kingdom. We clearly have had a very special relationship on multiple levels, especially on national security. I think that only deepens. The UK was with us in Ukraine, as was Europe, but the UK was with us and really one of the first. But even more importantly, the UK will be with us if, God forbid, we have to go to war with China over Taiwan. The UK is the only country that has publicly agreed to be, or committed to being, part of a US effort on Taiwan. So I think the relationship only deepens from here. One last point, not to be cynical, but President Trump does have some of his most important real estate properties in the UK. He cares enormously about that and actually he will tell anyone who listens that he's Scottish.
So I'd say on multiple levels, US-UK looks great and I think for UK boards, being able to engage with Europe and the US is a really unique advantage Post Brexit.
[00:09:26] Ralph Grayson: That's fascinating. I'm not sure that reflects what the British media thinks looking at it in the other direction. But your bottom line there is that UK boards should not expect any more surprises from Trump.
[00:09:39] Charles Myers: It depends on the issue. I mean, you know, in our world and at our firm, even from Trump 1, you know, we won't be surprised or we're shocked that Trump has done something. He is the most unpredictable American President in history.
For boards, you know with the US, what really works best is a constant marketing effort by the C-Suite and if the boards also want to get involved in this, but especially this c-suite of large companies with the US administration. I give this advice to all of our corporate clients.
It's almost like every time the C-suite, the CEO and others go to Washington, or go to the US, go literally with a PowerPoint. This President has a very short attention span, but you know, meet with, if you can meet with the President, meet with Scott Bessant, meet with Howard Lutnick, meet with the appropriate agency if it's energy, whatever your sector is, and show in writing concisely how much you've invested as a company in the United States, where by congressional district and by state, how many jobs you're responsible for and what your future investment plans in the United States are. If you can do in one or two pages that resonates really well. Everything with this administration, from the President down, is very personal and you need to be on their radar all the time. And I think for Europe, again, there's no penalty from Washington or from the US if companies are also continuing to invest in Europe and engaging with Europe. There will be penalties if companies are engaging too much with China. But with Europe in the US, that's not necessarily a negative or a black mark.
[00:11:15] Ralph Grayson: And just following on from that then.I think there've been stories about him saying, well, if you do business in the US you can't do business in China. Or putting rails around what a company may do here in terms of its global economic policy and strategy if it wants to remain embedded in the US.
[00:11:32] Charles Myers: Yeah, I do think that, and this is anecdotal, although the President has also said it, you know, publicly. But we have heard an additionally, anecdotally that message is being delivered from our commerce secretary and others to multinationals. It is not that they have to literally choose US or China. But I'd say a pretty keen sense of observation in Washington in the administration on what companies are doing in China. I wouldn't recommend that people pull out of China, that they not, you know, invest in China, if that's part of the corporate strategy. I would just be mindful that it is something the United States government takes very seriously as a threat and boards have to be aware of it. The other issue, and this applies to US companies, but I would put multinationals on there as well. You know, there is a list of companies in the White House that is ranked by order of loyalty or perceived loyalty. That's the world we're in, in Trump 2.0, and as part of that ranking, which is private, none of us have seen it. But as part of that ranking, how heavily invested in China and pro-China you might be as a company, I would say would put you kind of pretty far down the list.
You know, this is the world we're in. Boards and c-suites have to navigate this much more delicately than they've ever had to in our lifetime, Ralph. They can do it. You know, multinationals are incredibly,not only resilient, but incredibly nimble, and we're finding that with all of our corporate clients. They understand this and they are absolutely acting accordingly with the US administration.
[00:13:06] Ralph Grayson: I think everybody here who watched media last week was entranced by the tech bros all falling in front of Trump and telling him how wonderful he was. How do UK and European boards, I'm not saying we should be as obsequiousand take the knee,but how do they think about that?
Who do they engage with and where do they get advice from firms like yours? In terms of how to act in the US and how to deal with those relevant bodies.
[00:13:30] Charles Myers: Yeah, no, absolutely, and you know, watchingour wealthiest and most successful CEOs, primarily tech CEOs, completely fawning over the President, it's reminiscent of the Soviet Union or other authoritarian, or military dictatorships. It's just trulya new world that we're in in Trump 2. Trump 1 wasn't anywhere like this. This is really about Trump 2.0. It's about loyalty and it's about America first, including multinationals. The advice we give to our clients is three things. First, unfortunately you do have to engage invery direct and, as I mentioned earlier, very personal marketing. So depending on your sector, you know, if it's energy, make sure you're in front of our energy secretary. Try to be in front of Howard Lutnick, our commerce secretary as often as possible. If you can get a meeting with Scott Besant, I strongly recommend it. He is increasingly the most powerful person in the cabinet. Scott isexcellent by the way. What he's done on multiple occasions is wait till things kind of reach a mini crisis or come to a head and then he swoops in with solutions. So his star in the administration just keeps going up. He's a very important person. He was given the trade portfolio, which normally sits under commerce. That's how powerful he is. Get a meeting with Scott.
Then of course, in the White House, and if any company is going to make a major additional investment in the US. Whether it's a new plant you're buying, a new building, anything you're doing, you're committing X billions or tens of billions to the United States in terms of investment. Get a meeting in the White House and make sure that you can communicate that directly to the President. He may even do a press conference with you from the Oval Office. This stuff actually really matters, today. So I think, you know, that's really important. The other things that I recommend for our clients on all of this, in addition to that, is get a meeting with JD Vance. JD Vance, is not doing very much. Factually, he's been on more vacations than probably any Vice-President in history. But Trump hasn't really given him a portfolio, which is a little unusual. You know, typically Vice-Presidents are given a couple very specific jobs. His primary jobs seems to be attacker in chief, or defender in chief of the President. But he's an incredibly important person and the reason I recommend our clients get a meeting with him is he's kind of available. But secondly, and it's a very real and very serious issue. JD Vance will be the front runner in 2028 on the Republican side, at least initially because he is the Vice-President. This is controversial, but just to say, there is a 20% probability approximately that President Trump could have a heart attack or stroke in the next three and a half years, but just based on US actuarial tablesand not necessarily fatal but incapacitating. So, President Trump is a 79-year-old white American male who has lived on cheeseburgers. His health issues are, as with every Head of State, beingkept relatively secret. The fact that've released that he's got a vascular issue means it's pretty bad.
I wouldn't normally recommend this, meet with the Vice-President. But the truth is, given Trump's age and health profile, I would want to get to know, if I were a multinational, the Vice-President very, very well and get to know him early. He could become President in the next three and a half years, through incapacitation or death.
The last quick thing I recommend quite strongly is when in Washington also meet with the Democratic leadership. No one is doing this and I understand why. The Democratic party is in the wilderness, they're in the minority. But the truth is, meeting with Chuck Schumer in the Senate, meeting with Hakeem Jeffries in the House, is an incredibly important medium term planning priority because the Democrats will be back. They are likely to take the house next year. So Hakeem will be the next speaker and, the truth is, the Democratic leadership will remember who met with them when nobody else would. I would absolutely be meeting with the Democratic leadership today and keeping them updated on what your company is doing as well in the US.
[00:17:24] Ralph Grayson: Let's turn that on its head. I love that analogy or the advice to meet with the Democrats and you reference that they're in the wildness.
Last week, I think you held something called Westminster Day which was your view on UK politics. Is the Conservative party in the same wilderness that the Democrats are and what's the US view of Farage, Reform, and how the prospect of Reform government might impact the way boards here have to act and position themselves?
[00:17:53] Charles Myers: It's been fascinating. We did, as you mentioned, we had our Westminster Day last week withofficials, elected officials from all across the political spectrum, including Richard Tice from Reform UK, we had members of the Labour party, Conservative leadership, we didn't have the Greens, but, you know, so it was a really good cross section, and I would say a couple things in answer to your question.
First, Richard Tice was the best speaker by far and, even if he didn't agree with his message or his policy platform,the momentum with Reform UK is incredible, and I can see why now having seen him speak in person. So, you know, as we're sitting here today, the Conservatives, are I'd say probably just about as far in the wilderness here as the Democrats are in the US. The difference, between the US and the UK though, is we have elections every two years, major elections, midterms. So, the Democrats I think will be back sooner, or at least they have the opportunity to at least try to turn this around and be back. I do think they'll take the House next year, for example. Probably not the Senate. The Conservatives have a much tougher hill to climb electorally and in every other ways, I think that the conservative leader, Kemi is going to be out at some point in the next six months. She's not leading the party effectively at all and in this environment where you have the current Labour government who have just gone really, quite surprisingly to me as someone who has followed politics for 30 years, has gone from policy misstep to policy misstep. This is a Labour government that came to power, came to office, with a huge majority and have completely squandered it. Quite surprisingly actually. They're obviously on the defensive. They're trying to scramble to catch up or to turn this around. I think Angela Rainer was sacrificed. Personally, I think Rachel Reeves may have to go, in the next six months, and they'll bring in somebody from the City or that the markets and the private sector will be much more comfortable with, and by the way, I think the world of Rachel Reeves.
It's just I think this government's going to have to rebrand. part of the issue is if Reform UK continues to go from strength to strength and in an environment where you have a weak government in power, the Labour government, and a otherwise very weak opposition, thatgap or vacuum is the one in which Reform continues to make progress, and lastly Reform UK are running on a platform that has worked really well in the US for example, which is how President Trump came to power twice. Which is, Britain is broken and you tap into all of the disaffected voters, whether you're disaffected on immigration, whether you're disaffected, around the economy. The parallels are fascinating. I do think there will be a Reform UK government here, after the next general election. I think that's probably not a good outcome personally, but there will be enormous support along the way from President Trump. President Trump and Nigel Farage are incredibly close and I think ideologically pretty well aligned. You know, as I always say, when I'm here in London,you know, our politics are incredibly complicated. UK politics are pretty complicated as well. just to end this part on an optimistic note, you know, Labour have four years still, I think there's a chance they can turn it around. Governments, especially when they're in power, have a remarkable ability to turn things around. But getting through the November Statement, they're going to probably have to raise taxes. Fiscal is a major issue. Looking out to next year, they might be able to turn it around. So I don't want to write them off at all. I don't want to suggest I'm writing off the current government. They just have huge challenges in order to turn this around.
[00:21:19] Ralph Grayson: I'd love to come back to your comment about Richard Tice being a very good speaker. Did you get a sense that Reform can be a government in waiting? There's been a lot of press this week around who is their economic spokesman? You take away Tice, you take away Farage, who else is there of any substance? Did last week's event give you any perspective on that.
[00:21:40] Charles Myers: No, and I think that was one of the main sort of criticisms in the room or after Richard spoke, which is, two related things. First, what really is the economic platform and while they're out there, whether it was at their party conference just right after our Westminster Day or even at our day. But in general, they often will say slightly conflicting things in terms of economic platform. So one of the things they need to really work on is getting that platform, and the messaging, consistent. The second takeaway from our meeting with Richard was, when you're in the opposition, you can say anything you want. You're not being held to account for the implementation of all these policies or any part of your platform. So I think they, you know, clearly benefit from being able to really throw out anything, in terms of policies, in terms of criticisms,where they're going to need to get much better organized.
It's a pretty disorganized bunch, even Nigel admits that, you know, his main message at the party conference was, we need to professionalize, and I think they have time. They've got four years and they will continue to fine tune their message, and I think they'll keep winning at the local level and in Parliament. They will continue to win, given their momentum. I can tell you anecdotally, you know, someone in the room who was a Labour voter at the end said he's been absolutely convinced that he's going to vote Reform after hearing Richard. So, you know, that's what this government and the Conservatives have in terms ofchallenge and the work to do.
[00:23:02] Ralph Grayson: I'd love to get your advice more generally about how boards think about engaging with different stakeholder groups. Be those politicians, be they activists. Two examples spring to mind with your Norwegian finance minister this week, basically saying that Norges investment management was going to withdraw from investing in companies that, in their view, government's view, was violating international law, which is a particular reference to their stance on Israel. Conversely there was a great quote I met by, a UK pension manager here, who better remain nameless, who said, it's not my effing job to make peace in the Middle East.
So all of this comes down to how do boards think about engaging and identifying with becauses with platforms? Let's not go down a rabbit hole too much of ESG, but of course everybody wanted to be Corp certified. Everybody wanted to be whatever a couple of years ago. Trump seems to have changed all of that. But how would you advise boards to think about their stakeholder engagement?
[00:24:07] Charles Myers: Yeah, I'd say a couple things. One,just to pick up on the last part that we were talking about. Boards, and certainly the C-suites, of major companies in the UK need to be engaging politically. It's not as strong a tradition here in the UK typically and lobbying, as you know, in the United States is just out of control in terms of how much, you know, engagement there is from companies with our government and that's been the case for a very long time, and even under Trump, much more. Lobbyists are doing very well right now in, in Washington. In the UK it'snot as front and center. But I think for major companies engaging with Labour, engaging with the Conservative leadership, and even Reform UK, is important. We're in a very different world today and engaging politically actually does matter. You don't have to support them necessarily, but you need to engage.
On the broader question of ESG and kind of where we're headed. I thought it was interesting, you know, Norges being the largest sovereign wealth fund in the world. Can do and say I think pretty much whatever they want and I admire them for taking a stand on certain issues. I don't agree sometimes, but I admire companies that are willing to stick their necks out and take a position, sometimes controversially.
But in the US the war on ESG and the war on DEI from this administration is so intense that there are penalties.Companies, the regulators, the administration itself, are absolutely hyper-focused on trying to root out DEI practices, root out ESG commitments, and so unfortunately, I think, you know, companies really have to make a choice. They have to make a decision, are we going to de-emphasize these very important initiatives, or do we lean in. There's a third choice, which is kind of stay under the radar and don't try to change too much. A lot of companies are trying that third path and I understand that. But here's where I come out on this issue ofESG and DEI. You know, we can change the acronyms, we can call it something else, but I think it's somewhat short termist for a major company to on Monday, believe in and have spent years reiterating their commitment to diversity and inclusion, to environmental, to sustainability, and other governance issues, and on Tuesday to say, actually we don't really believe in that anymore. I think that is really challenging. I understand it, I'm not criticizing it because that's the world we're in. But I think it sends a really bad message to your employees, very bad message to your customers or your clients, and Trump's not going to be around in three and a half years. It's a bit shortsighted. I understand it, but I would say that companies that are willing to either continue with their existing commitments to these really important issues,or ones, that might be leaning in, I think looking down the road will be rewarded. I can tell you there are some, you know, companies in the US that can't get close enough to Trump, that actually might be penalized a little bit, down the road, from clients and others and I refer, in this case, to some of our law firms that have capitulated and settled so quickly with President Trump and already they've lost senior partners, they've lost customers or clients. I can tell you post-Trump, some of those law firms will have even fewer clients.
My advice to companies and to boards is again, try to take a slightly longer term view on this. If you really believe in diversity and inclusion, you believe in governance, you believe in climate, stick with your conviction and your beliefs, it really will matter medium to long term.
[00:27:34] Ralph Grayson: Interesting. Before we leave ESG, there's a comment I've heard a couple of times now that geopolitics is the new G in ESG. I was in a room filled with Generals and Admirals and we were discussing how the military can learn from boardrooms about risk assessments and how boards can learn from the way the military think about risk.
It seems to me that geopolitical risk management now means boards need to treat geopolitics almost like we do now with cyber as a standing board agenda item for scenario planning. When you think about board composition and expertise, should boards be strengthening geopolitical, supply chain and risk expertise, perhaps move away from the trend we saw after COVID of having CFOs and CEOs on the board?
Should we consider appointing directors with national security, energy or logistics backgrounds and how should boards refresh global outlooks to avoid group think based on that old globalization model? Do we require a geopolitics seat on the board table?
[00:28:40] Charles Myers: Yeah, I think it's a great question and the answer is yes. You know, what we have found with our biggest clients, biggest multinationals, as well as you know, most of the big banks are clients of ours as well, for example. Almost every big insurance company is a client, because we focus on risk; is that they already internally built a geopolitical risk team,or are in the process of expanding an existing one, which typically was one person and I think that effort to really bring in-house, as well as using advisors like us and others. But really also bringing in-house expertise on geopolitical and macro risk, especially geopolitical risk is vital. I think ultimately elevating that to the board is also something that we're going to see more and more.
Having a boardmember or someone on the board that can really anticipate and explain geopolitical tension and ultimately potentially conflict, and then overall risk in terms of how to navigate that with long-term strategic planning is vital today, it's only going to be become more important because we are now in an extended period of not only geopolitical tension, we are in an extended period of geopolitical conflict. So absolutely, and we recommend that. I think boards that are doing that are already two steps ahead.
[00:29:56] Ralph Grayson: And do you agree with the thesis that globalization is now fragmenting into two big trading blocks and we're going to see more intra trading between those two geopolitical blocks rather than across those boundaries. How is geopolitics going to meet economics, trade, supplies, movement of capital and people?
[00:30:17] Charles Myers: I am a believer in, you know, the very well covered concept of a multipolar world. These trends are real. These are structural changes to the, you know, global order, on multiple levels. Geopolitically or militarily, the level of technology, and then third on trade, for example, and that will only continue to accelerate from here and it's in part because of COVID and then the invasion of Ukraine. Both of those events exposed really extreme vulnerabilities in all of our supply chains, by the way, but especially in the US supply chains, and it was a real wake up call, I think for the United States. So what Joe Biden did was start something I would've never predicted in my career, by the way, which is classic industrial policy. It's incredibly uncommercial, uneconomic, and very un-American. There's a reason we don't manufacture everything in the United States. But it isn't about that. It's about national security and securing our supply chains The fact that it's uneconomic, is why the Chips, IRA and infrastructure bills, $1.6 trillion this in effect industrial policies being subsidized by the American taxpayer to the tune of 1.6 trillion. Trump is taking industrial policy even further. He is isolationist on top of this.
So the United States pulling back a bit even, from some of our overall military commitments. But he is incredibly protectionist. So I think as we go forward, the two main trends will be the United States continuing to focus more on America first. Being a bit more isolationist. But also very protectionist. These tariffs are here to stay, we're going to drive a huge amount of revenue to help offset the deficit or the tax cuts and the deficit. But even if a Democrat wins the White House in 2028, he or she will not take these tariffs off. This is the new world order and boards need to really grasp that. Most already do, of course. But just on this broader question of are we going to see two different trading orders, two different financial systems, two different technology systems, one dominated by the US, one by China? I think it's a little early to say that we are seeing that on trade, of course, but most big countries and even small countries have traded with China for, you know, many years, for decades. and some countries are tilting much more that way. Brazil already had, by the way. It's one of the main issues with Brazil.The second is were outrageously interfering in their judicial process aroundtheir President, their former President. But South Africa had already tilted much more, other parts of Africa to China. But I think that on the issue, just looking out, will we have two completely binary systems? I think that's a bit exaggerated and I say that because I don't think the Chinese economy is big enough. They have huge structural issues, deflationary issues, there's trust issues, and I think whatever the US based system, which will include Europe and other countries, major countries in Asia, will be the much bigger trading block, the much more advanced technologically and we also all together have a national security interest in working together.
I'm a little more sceptical on China's ability to rival the US globally on a lot of these issues and if I can just one quick point. As concerned as many investors are, many C-suites are, and many boards are, about the governance issues in the United States, the attack on the Fed, other institutions. If that's, and it is a legitimate concern, I think, you know, boards and C-suites should be 50 times more concerned about the G or governance in China. So I think that, you know, if anything, China's becoming more repressive domestically, and I think possibly, ultimately imperialist. I don't think the outlook for that trading and tech block is anywhere near as optimistic as some people think.
[00:34:01] Ralph Grayson: Fascinating. You touched on the Fed there. One last thing I wanted to ask you that this theatre that's playing out in the US around Central Bank Independence, and we're seeing a microcosm here with Starmer appointing his own economic advisors and speculation around that. What that means for Reeves and Treasury versus Number 10.
What is this theatre that's happening in the US around the Fed, Central Bank independence, Governors, and given that the well stated Trump desired to see a significant cut in interest rates. Why should we be looking at Central Bank independence with such care if we're a board member and worrying about what impact that there might be on cost of capital?
[00:34:43] Charles Myers: Yeah, it's absolutely vital to the United States maintaining its safe haven status,and you know, also underpinning the Dollar as the world's reserve currency, meaning an Independent Central Bank. President Trump, with the Fed, I'd say of all the things that he's done in the last eight months, the most potentially damaging, you know, in terms of institutionally, is this issue of trying to influence monetary policy. You know, with Lisa Cook possibly getting fired, replacing the Fed chair, which he will, which again, he'll have the right to do. But ultimately, over time having a board, an FOMC board that tilts more dovish, I think, you know, is a potential concern. Having said that, I do think the fears are overdone.
The FOMC is a 14 member voting committee, even with what Trump's doing, he'll have a minority of voters. But he's appointed on that board and I do think the Fed will remain independent. I understand the concerns and I say that acknowledging Trump's doing almost everything he can to try to undermine some of the independents and force them to cut rates or be more accommodative. I feel very confident that the Fed will remain independent.
The broader issue though, because I think it's important, is the attacks on the Fed are attempts to undermine the Fed is just part of a broader strategy from President Trump. You know, we have a US President that is completely out of control and almost no guardrails are working in the United States. The only guardrail that's working today is the bond market, is the 10 year yield. Anytime there's a hiccup in the equity market, Trump would climb down. You know, of course they care about the equity market a lot and it keeps hitting new highs, which is emboldening him. But he really, they really care about the 10 year. So when the 10 year yield goes to four and a half, they get nervous. At five they will blink. At five and a half, they panic. You know, this isthe only guardrail that's working, in the United States today because the President is running roughshod over the Constitution, Congress, the DOJ, the media, our law firms, our universities, the Fed and our allies. So, he will continue to do that and there won't be any real accountability until the midterm elections where I do think the Democrats will take the House and can start to put in some accountability and some guardrails. But with that, if I can just to also say it's really important to separate out our politics and some of these things that President Trumpis doing, from what is actually really happening on the ground and with our economy. The outlook for our economy remains very positive. We have unprecedented ex COVID fiscal stimulus. We have monetary stimulus that's kicking in this month. The Fed's cutting rates. Price of oil where it is, this lower price of oil, hugely stimulative for the US economy. Very good for the US consumer. FDI running 10 to 15% above average into the US. corporate earnings are strong. CEO confidence is up. Consumer confidence is flat to up. Inflation under control for now. And we have the biggest deregulatory push in financial services and energy since Ronald Reagan. This setup for the US economy. I've been bullish all year. I've been very positive all year. I think the equity market's been right to hit record highs all year and I remain optimistic on the outlook for the economy. Again, acknowledging some of the institutional damage Trump is doing, those are medium to long-term issues. I remain very optimistic on the economy.
[00:37:55] Ralph Grayson: Fascinating and stagflation here. Everybody watching the Gilts market very carefully. The adage of America's sneezes, Europe gets cough. I mean, should we be worried here as a board member in terms of stagflation or does that attitude,or your appraisal of the US market does that read across into the UK?
[00:38:17] Charles Myers: Yeah, I think, you know, the bond market is always, you know, the most, I'd say efficient forward discounting mechanism. Much more than equities, you know. Bond markets around the world are, you know, showing signs of concern around countries that are running, you know, both current account deficits, but also huge fiscal deficits and relatedly the overall level of indebtedness.
France is the country of most concern, I'd say, followed by the UK, then Japan. The US is an ongoing concern. The United States though, has this really un rivaled privilege of the world's reserve currency. You know, we'll be able to continue to run, not that it's a good thing, but continue to run these budget deficits and fiscal deficits. France and I think, you know, it's a slow motion train wreck, but the truth is for so long countries like France and now even the UK and Japan have continued to borrow and spend and borrow and spend, and you can only do that for so long, and I think we're getting closer to a point where the bond markets are starting to, you know, really lose patience. So governments have to make a really tough decision and it's hard to do in France and the UK when the politics are so complicated. Meaning it's hard to make tough decisions. They need to cut spending. Very hard to do in both countries given political environment and they also probably need to raise taxes, deeply unpopular. So I think in order of concern, and we see this in the bond market, especially at the long end. First is France, then the UK, then Japan, and then the US.
So it's absolutely a critical issue and it will continue to play out. It is a bit of a slow motion train wreck. But we're only in, I'd say, the early innings of thisongoing issue.
[00:40:01] Ralph Grayson: Well, something to look forward to. Maybe a follow up podcast in, in due course. Charles, we've touched on so many subjects. We could have talked a lot longer. We've massively, massively overrun on time. Thank you so much. If people are intrigued to follow Signum, follow you, how do they connect perhaps?
How do they read your thoughts and your thought leadership?
[00:40:20] Charles Myers: Yeah, absolutely. They can reach out to me, charles@signumglobal.com or go into our website, signumglobal.com and send us a message. Happy to add anybody. Happy to engage. Thank you for the opportunity and I really think the most underappreciated political risk in the US today, and I say this in every meeting, is not a third term.President Trump is not going to get a third term. My worry, and the biggest risk, I think is the opposite, is what I mentioned earlier, is that if something happens to him in the next three and a half years, because we get JD Vance. And the issue with JD is first he's 40 years old. We don't really know where he is politically. But I think at his core, he is actually much more isolationist than President Trump. He's certainly more anti Europe. So I think that's a concern. I do think at his core, he's also more protectionist and more populist than Trump.
I've been saying President Trump is a moderate. Literally, President Trump is a moderate. He has no fixed ideology and he is transactional. JD Vance if he becomes President tomorrow, you know, through a death or incapacitation. JD is not a moderate, and I think we'll be much more dogmatic and I thinkthat's going to create a whole new set of problems.
Also, why it's important to get to know JD Vance now. But I do worry a lot about this. So even though I've run against President Trump three times in three elections. I'm praying he lives. I'm lighting candles. We need to make sure he makes it to the end of his term.
[00:41:42] Ralph Grayson: And as my neighbour Jeremy Clarkson would say. And on that bombshell, Charles, thank you very much for your time. Safe travels.
[00:41:48] Charles Myers: Excellent. Thanks for having me.
[00:41:50] Ralph Grayson: I hope that you've enjoyed listening to this podcast and have found it helpful when thinking about how to approach your own path to the boardroom. If you would like to push this a little bit further, Sainty Hird runs a bespoke one to one programme designed specifically to this end. For more information, please visit our website, saintyhird.com, follow us on LinkedIn, and subscribe to the Boardroom Path to receive new episodes. Thank you for listening.