July 30, 2015
As if things weren’t confusing enough for Barclays Bank shareholders we now learn that deputy Chairman and Senior Independent Director (SID) Sir Michael Rake is to leave to take up the Chairmanship of another financial services company (in addition to his role as Chairman of BT).
This news came in the same week as the sacking of Chief Executive Antony Jenkins – whose removal, according to Chairman John McFarlane, was orchestrated by Sir Michael.
As Oscar Wild would have said – “to lose one senior board member may be regarded as a misfortune, to lose two looks like carelessness”
John McFarlane took on the role of acting Chief Executive in addition to his role as Chairman of the Bank as the board struggles to formulate a clear strategy for its investment division – whose head, Tom King, has indicated that he is looking to leave the Bank early next year.
It will be interesting to watch Sir Michael Rake’s progress as he takes up his new role – the UK Corporate Governance Code does not forbid anyone from Chairing two listed companies but it does encourage them to ensure that they are able to devote sufficient time to discharge their responsibilities effectively.
July 30, 2015
The UK Corporate Governance Code, best practice advice for the UK’s listed companies, states that “There should be a clear division of responsibilities at the head of the company between the running of the board and the executive responsibility for the running of the company’s business. No one individual should have unfettered powers of decision” – in other words companies should not combine the roles of Chief Executive and Chairman.
In firing its Chief Executive, Antony Jenkins and appointing Chairman John McFarlane as acting Chief Executive, Barclays Bank are flouting this key principle of the code by having one man in charge of both the board and the business.
Mr McFarlane, who took over the day-to-day running of Barclays on July 17, said there had been some “rumblings and concerns” from non-executive directors over the past few weeks and the decision was taken at a board meeting last night with the announcement made this morning (08/07/2015).
Antony Jenkins leaves the bank with 12 months’ notice and will receive his current annual salary of £1.1 million, £950,000 in role-based pay and a pension of £363,000 a year.
Sir Michael Rake, Barclay’s senior non-executive director (SID), said: “I reflected long and hard on the issue of Group leadership and discussed this with each of the Non-Executive Directors. Notwithstanding Antony’s significant achievements, it became clear to all of us that a new set of skills were required for the period ahead.”
The board does not have a clear timetable for recruiting a new Chief Executive and would seem to be in no hurry to fill the role. It will be interesting to see what pressure is exerted by the Financial Reporting Council, the guardians of UK Corporate Governance, on the Barclays board to encourage them to resolve this unsatisfactory situation in a timely manner.
July 8, 2015
Caroline Gourlay (email@example.com) makes some interesting points in her latest blog, Need a NED? Here’s how to avoid the pitfalls, about the need for boards to fully understand the role of the Non-Executive Director before making an appointment.
The NED role is very different from that of an executive director and whilst being an experienced executive is almost a pre-requisite for being an effective NED (there are exceptional people who make very good NEDs without having been executives) the role requires a set of skills which not all good executives possess.
The question that Caroline addresses is how can a board tell that a prospective NED is going to be an effective member of the board?
Key to making the right appointment, in addition to a thorough understanding of the NED role, is a process that is probably not the traditional 50 minute interview but one which fully explores the ability of the candidate to fulfil the role effectively