OUTLOOK : A nasty stain on a whiter-than-white image

Unreconstructed corporate freewheelers rejoice. You are now in good company. Perhaps by misfortune as much as anything else, the mighty Pru appears to have been doing its damnedest to join their ranks. Just in case the point has not sunk in, this is the Pru, the sort of savings and investment institution for whose benefit the rules and codes of conduct on share dealing and corporate governance were put in place.

No one would have believed it, to judge by events. Whatever the rights and wrongs of it, what is now emerging amounts to a public relations disaster of monumental proportions. If there was ever a business founded on, and fed by, good PR, the Pru is it. To sell its products the Pru needs to be seen as whiter than white. As an investment company that has done as much as anyone to push the case for adequate standards of corporate governance, it also has to be seen to be practising what it preaches.

To have your chief executive resign amid allegations of a breach of Stock Exchange rules is only the half of it. It now transpires that despite repeated and very public denials of any suggestion of mis-selling, the Pru is lambasted in a Lautro report forjust such in the area of personal pensions. Within months it faces disciplinary action over the affair.

Your can argue until the cows come home about whether Mick Newmarch's sale of share options just ahead of two important announcements affecting the company was a breach of the rules. Even if the company knew the rules and thought Mr Newmarch within them,it was foolish in the extreme to allow him to go ahead. It must have known how it would look. Sir Brian Corby, chairman, apparently cleared the transaction, so he should take at least some of the blame.

There is, of course, a very respectable case for arguing that many of the rules governing share and option dealing by directors are a lot of unnecessary bureaucratic nonsense. But it is one thing to think that, another to say it and quite another still to jeopardise reputation by even coming close to a breach.

Mr Newmarch has always been a man not afraid to speak his mind, an iconoclast ready to challenge accepted wisdoms. Unfortunately for him,, life assurance does not thrive on the unconventional approach. It could take years for the Pru to rebuild reputation.