Basil Smallpeice

Sir Basil Smallpeice
Born	(1906-09-18) 18 September 1906 Rio de Janeiro, Brazil
Died	12 July 1992(1992-07-12) (aged 85)
Occupation(s)	Accountant, Corporate leader
Known for	Director roles at BOAC, Cunard, Lonrho; Managing director of BOAC; Chairman of Cunard

Sir Basil Smallpeice (18 September 1906 – 12 July 1992) was a distinguished English accountant and corporate leader who held directorships at prominent enterprises such as the government-owned airline British Overseas Airways Corporation (BOAC), the shipping firm Cunard, and the mining giant Lonrho.

During his tenure at BOAC, initially as financial comptroller and subsequently as managing director, Smallpeice was pivotal in the acquisition and deployment of jet aircraft for commercial passenger travel. He managed the procurement of the de Havilland Comet, Boeing 707, and Vickers VC10. His leadership encompassed overseeing the launch of the Comet 1, addressing the tragedies caused by metal fatigue that resulted in three fatal accidents, reintroducing the improved Comet 4 model, and initiating the first jet-powered transatlantic flights in October 1958. Furthermore, he was crucial in adopting the Boeing 707 equipped with the innovative Rolls-Royce Conway bypass turbofan engine. Smallpeice departed BOAC together with chairman Matthew Slattery following disputes with government authorities concerning financial backing linked to the acquisition of the Vickers VC10.

At Cunard, where he served as director and later chairman, Smallpeice revolutionized both passenger and cargo divisions. He curtailed heavy financial losses by divesting the Queen Mary and Queen Elizabeth ocean liners, then directed a comprehensive redesign of the Queen Elizabeth 2, transforming it into a profitable luxury vessel. On the freight front, he championed containerisation by merging smaller shipping companies and establishing joint ventures essential for operating larger container ships. During his chairmanship, Cunard commissioned the Atlantic Conveyor as part of the Atlantic Container Line collaboration.

Smallpeice’s concluding significant appointment was as a non-executive director at Lonhro, where he uncovered unauthorized payments to Duncan Sandys and illicit commitments made by CEO Tiny Rowland. Alongside seven fellow directors, he attempted to oust Rowland due to mismanagement and improper share option practices but was thwarted by a court injunction. Despite strong backing from both public opinion and financial institutions—earning them the moniker "the straight eight"—they all resigned following an extraordinary general meeting in 1973. Prime Minister Edward Heath publicly condemned Rowland’s behavior as "the unacceptable face of capitalism."

In addition to his corporate roles, Smallpeice acted as an administrative advisor within Queen Elizabeth II’s household. He earned royal confidence through his coordination of BOAC-operated royal flights, notably arranging the journey that transported Princess Elizabeth to Kenya in January 1952 and her return as Queen shortly thereafter.

Early life

Born on 18 September 1906 in Rio de Janeiro, Brazil, Smallpeice was the son of Herbert Charles Smallpeice, a senior clerk employed by the British Bank of London and South America, engaged in South American business activities. After contracting malaria while in South America, Basil returned to England for education at Hurstpierpoint College followed by Shrewsbury School. He subsequently commenced his career at Bullimore and Co., an accounting firm with offices in London and Norwich, working as an articled clerk. Smallpeice qualified as a chartered accountant in 1930 while simultaneously earning a University of London Bachelor of Commerce degree.

Business career

From 1931 until 1937, Smallpeice was employed at The Hoover Company in the capacities of accountant and assistant secretary. He then transitioned to Royal Doulton, where he held the positions of chief accountant and secretary up to 1948. During World War II, with Royal Doulton’s managing director called back to active military service, Smallpeice assumed the role of acting managing director. His occupation was classified as a reserved occupation, exempting him from military conscription, although he contributed by serving in the Home Guard. For a short period, he also worked within the Organisation and Methods Division of HM Treasury before returning to Royal Doulton.

Throughout the war years, Smallpeice, alongside other accountants, produced influential writings on topics such as accountancy, taxation, and management practices. His 1941 paper entitled "The Future of Auditing" published in The Accountant generated considerable debate within the Institute of Chartered Accountants in England and Wales (ICAEW). This discourse led to the establishment of the Taxation and Financial Relations Committee in 1942, with Smallpeice among its early members. In addition, he contributed as a board member of the Office Management Association.

Working in partnership with E. H. Carr, then assistant editor at The Times, Smallpeice advocated for employers to deduct income tax directly from wages for transfer to the government. This proposal was presented to Paul Chambers at the Inland Revenue. The initiative evolved into the PAYE system, trialed between 1940 and 1941 and officially implemented in 1944, greatly enhancing wartime tax collection efficiency.

While at Royal Doulton, Smallpeice further shaped ICAEW policy by promoting representation for chartered accountants working in industry on the council and supporting their attainment of Fellowship status. As a result, he served on the ICAEW council from 1948 through 1957.

British Transport Commission

In 1948, after recognizing that a board position at Royal Doulton was unattainable, Smallpeice departed and joined the state-run British Transport Commission (BTC) alongside accountant Reginald Wilson. Wilson, acting as comptroller, appointed Smallpeice as Director of Costs and Statistics. However, managing an enterprise employing 600,000 individuals without sufficient government backing proved impractical, prompting Smallpeice to seek alternative roles.

Following consultations with Harold Howitt, Smallpeice was eventually convinced to accept a position at BOAC under Miles Thomas as financial comptroller tasked with instituting rigorous financial controls. Initially reluctant due to BOAC’s public ownership status, he agreed after discussions with Thomas who tailored the role to his expertise.

BOAC

Commencing on 1 January 1950, Smallpeice joined BOAC as financial comptroller, emphasizing delivery of practical financial information to management rather than imposing directives from central headquarters. The position was elevated to a board-level role in 1953, and by June 1954 he advanced to deputy chief executive.

He advocated strongly for acquiring the de Havilland Comet, recognizing jet technology’s potential to revitalize BOAC’s outdated fleet. Despite early fatal accidents caused by metal fatigue—which resulted in chairman Miles Thomas stepping down in 1955—Smallpeice retained his role under new chairman Gerard d'Erlanger and was promoted to managing director in 1956.

Both d'Erlanger and Smallpeice supported British aircraft manufacturers throughout the Comet crisis. Nevertheless, delays involving British models such as the Bristol Britannia and VC10 compelled BOAC to procure American-made Boeing 707 jets. Smallpeice facilitated this by arranging visits for staff to assess Boeing’s prototype and securing government consent.

By 1959, BOAC had placed orders for 35 Vickers VC10 aircraft, increasing this number to 45 by 1961. Alongside a decline in transatlantic traffic, heightened competition, and expenses related to VC10 and Britannia purchases, BOAC began incurring substantial losses starting in late 1961.

During this timeframe, Smallpeice partnered with Sir Edward Fielden on organizing royal flights for Queen Elizabeth II and other members of the royal family. His contributions earned him a Knight Commander of the Royal Victorian Order in 1961.

Following d'Erlanger's retirement in 1960, Matthew Slattery assumed chairmanship while Smallpeice continued as managing director. Together they endeavored to reduce costs amid falling passenger numbers and rising maintenance expenditures. Competition intensified from independent British carrier Cunard Eagle Airways, which had ordered Boeing 707s targeting transatlantic routes traditionally dominated by ocean liners such as .

Concerned about competition pressures and restricted access to Boeing aircraft, Smallpeice initiated merger discussions with Cunard Eagle in April 1962. The joint venture BOAC-Cunard commenced operations that June with Smallpeice serving as managing director alongside his existing BOAC responsibilities.

Relations between BOAC and Minister of Aviation Julian Amery became strained over debt write-offs connected to British aircraft acquisitions. An independent financial review conducted by John Corbett was commissioned but its full findings were not disclosed to BOAC leadership. Under pressure, Slattery retired late in 1963 and was succeeded by aviator and banker Giles Guthrie, who combined chairman and chief executive roles.

Guthrie’s organizational restructuring rendered Smallpeice’s position redundant; he was requested to resign toward the end of 1963 amidst ongoing disputes concerning financial policies. Both Smallpeice and Slattery regarded their exits as dismissals. Subsequently, Guthrie secured government debt relief and funding adjustments that corroborated their earlier concerns.

Despite these difficulties, Guthrie acknowledged in 1964 that improved financial outcomes for fiscal year 1963–1964 were largely attributable to foundational efforts made by Smallpeice and Slattery.

Cunard

Upon departing from BOAC, Smallpeice sought advice on his next career move from Kim Cobbold, the Lord Chamberlain. Cunard Line, already acquainted with Smallpeice through the BOAC-Cunard collaboration, extended an invitation for him to join their board in December 1963. Although he initially declined, Smallpeice embarked on a three-month cruise before ultimately accepting the position in April 1964.

Following Bill Donald’s retirement in June 1965, Smallpeice was elevated to deputy chairman. Later that year, in November, John Brocklebank stepped down due to health issues, leading to Smallpeice’s promotion as chairman and chief executive.

At the time of Smallpeice’s appointment, Cunard was grappling with considerable financial difficulties, having recorded a $7.2 million loss in 1965 primarily attributable to passenger ship deficits despite profitability in other shipping sectors. He explored merger possibilities with Ocean Steamship Company and P&O; however, negotiations failed as none of the parties perceived mutual advantage.

The financial strain intensified with the 1966 National Union of Seamen strike, compelling Cunard to divest its stake in BOAC-Cunard. To bolster company leadership, Smallpeice brought aboard seasoned industry figures such as Stormont Mancroft, Priscilla Buchan, John Wall, and Maxwell Joseph.

Smallpeice managed the outfitting of Cunard’s new cruise liner Q4 (later named Queen Elizabeth 2), a project initiated under Brocklebank’s tenure. He authorized modifications to the original design by replacing the conventional three-class arrangement with a more adaptable two-class system for North Atlantic routes and a single-class configuration for Caribbean cruises, aiming to attract American clientele.

In response to declining market conditions during 1967, Cunard sold the RMS Queen Mary to generate capital; this was followed by the sale of RMS Queen Elizabeth in 1968.

The naming process for Q4 involved discussions with Michael Adeane, the Queen’s Private Secretary. Initially slated to be called Queen Elizabeth, the monarch instead launched it as Queen Elizabeth the Second. To avoid confusion with the sovereign's title, Smallpeice requested approval to use an Arabic numeral rather than Roman numerals.

Smallpeice also spearheaded modernization efforts within Cunard by adopting containerization technology. After unsuccessful merger talks with Overseas Containers group, Cunard collaborated with Blue Star Line and others to establish Associated Container Transportation (ACT) in 1966. Following Alexander Hull’s passing in 1967, Smallpeice assumed the role of ACT chairman.

In Australia, Cunard’s container operations merged into Associated Container Transportation (Australia), partnering with the government-owned Australian National Line to form Pacific America Container Express. This venture connected Australia and North America through the Panama Canal. Smallpeice chaired both organizations until his retirement in 1979.

Regarding North Atlantic cargo services, Cunard joined Atlantic Container Line (ACL) in December 1966 alongside Wallenius Lines and additional partners. Cunard constructed two ACL vessels: and , with the latter being lost during the Falklands conflict in 1982.

The introduction of containerization restored Cunard’s profitability; by 1968 profits reached £2 million and increased to £3 million in 1969, resulting in a corresponding rise in share prices. Nevertheless, economic downturns in 1970 caused losses and share depreciation, leaving Cunard vulnerable to takeover attempts.

Smallpeice engaged McKinsey & Company to evaluate Cunard’s future prospects but was unable to prevent Trafalgar House from acquiring control beginning in June 1971. He accepted an enhanced offer and presided over Cunard’s final independent board meeting on 25 August 1971, marking the end of its 93-year history as a standalone company.

Lonrho

Smallpeice had a brief tenure on the Trafalgar House board, departing in January 1972, yet he continued to serve as chairman of Associated Container Transportation (Australia) following requests from both Trafalgar House and the Australian government.

In March 1972, Sir John Thomson from Barclays Bank invited Smallpeice to join the Lonrho board amid the company’s refinancing challenges. Duncan Sandys, a Conservative politician and former cabinet minister, was appointed chairman, while Smallpeice took on the role of non-executive deputy chairman. Together with Edward du Cann, they established a new board focused on concerns over CEO Tiny Rowland’s precarious £80–100 million sugar refinery project in Sudan during the refinancing process. The original deal was scaled back to a feasibility study, which temporarily eased tensions.

By early 1973, auditors uncovered unauthorized payments amounting to £44,000 made from a Cayman Islands subsidiary to Sandys, who subsequently reimbursed the sum. Additional financial discrepancies surfaced, leading Smallpeice and other directors to contemplate resignation. However, legal advisors warned against stepping down due to potential liabilities and suggested inviting an inspection by the Department of Trade and Industry, though this was ultimately discouraged after discussions with the Bank of England.

The board insisted that Rowland step down from his executive positions but remain on the board as a non-executive director; he declined this proposal. When the board voted to remove him, Rowland secured a High Court injunction preventing his ousting. Although further legal attempts failed to block a shareholder vote, Rowland’s 20% shareholding and proxy support ensured his continuation on the board, resulting in Smallpeice and seven other directors being removed.

In 1973, Prime Minister Edward Heath publicly criticized Lonrho as "the unpleasant and unacceptable face of capitalism". This led to a Department of Trade and Industry inquiry concluding in 1976. Smallpeice and his colleagues earned the nickname "the straight eight" for their ethical stance but experienced professional setbacks during the investigation. The inquiry exposed illicit payments made to Sandys and Angus Ogilvy, bribery involving African leaders, and breaches of United Nations sanctions through trading with Rhodesia’s white minority government.

Other interests

From 1965 until 1969, Smallpeice served as a director of Martins Bank, working alongside Sir John Brocklebank—his predecessor as Cunard chairman—remaining until Martins merged into Barclays Bank in 1969. Prior to this, he was part of Martins' London local board between 1964 and 1965 and continued on Barclays' London local board post-merger until 1973.

Throughout his career, Smallpeice actively participated in various professional organizations. He was a council member of the Institute of Chartered Accountants in England and Wales from 1958 to 1961 and also served on the council of the Institute of Transport. His involvement with the British Institute of Management spanned two periods: 1959–1964 and 1965–1975; he chaired this body from 1970 to 1972 before becoming vice president. Additionally, he contributed as a member of the Government's Committee for Exports to the United States between 1964 and 1966 and held the presidency of the Institute of Freight Forwarders during 1977–1978.

In 1975, Smallpeice partnered with John Corbett at Peat, Marwick, Mitchell & Co., providing consultancy services in air and sea transportation; this firm later became part of KPMG in 1987.

His association with BOAC led to his becoming a liveryman of The Guild of Air Pilots and Air Navigators in 1960 and membership in the Air League. He succeeded Clive Hunting as chairman of the Air League in 1971, serving a three-year term. Furthermore, he was a companion of the Royal Aeronautical Society from 1960 until 1975 and became a liveryman of The Worshipful Company of Coachmakers and Coach Harness Makers in 1961, representing manufacturers within the aircraft industry.

Smallpeice maintained board positions with Associated Container Transportation (Australia) and its partnership with Australian Line until his retirement in 1979. His final professional appointment was as Administrative Adviser to the Queen's Household, retiring in 1980.

Personal life

Smallpeice entered into matrimony twice during his lifetime. His initial marriage was to Kathleen (Kay) Singleton in 1931, and their union lasted 41 years until Kay passed away in 1973 from a blood disorder. Later that same year, on 2 November, he wed Rita Burns, who had previously served as his secretary at Cunard, and they remained married until his death in 1992.

In recognition of his role coordinating flights for the Queen and the royal family while at BOAC, Smallpeice was honoured in 1961 with the title of Knight Commander of the Royal Victorian Order. His accolades also extended internationally, including Lebanon’s National Order of the Cedar awarded in 1955, receiving the Key to the City of San Francisco in 1959, and being presented with a Pioneers Award by the Containerization Institute in 1981 for his impact on container shipping.

Outside his professional pursuits, Smallpeice held the position of chairman for The English Speaking Union of the Commonwealth between 1965 and 1968. He also contributed to community cultural and healthcare initiatives, serving as leader for organizations such as the Leatherhead New Theatre Trust and support groups linked to Cobham Cottage Hospital and St. George’s Church in Esher. His memberships included esteemed clubs like London’s Athenaeum and Boodle’s, as well as the Melbourne Club in Australia. His personal interests encompassed golf and gardening.

The presence of Lieutenant-Commander Sir Russell Wood, representing Her Majesty The Queen, at Smallpeice’s funeral underscored his notable service and esteemed connections.

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