Financial News

  • 17 February 2014, 14:11

Barclays Begins Search For Walker Successor

Barclays is kicking off a formal hunt for a new chairman just 18 months after appointing Sir David Walker to help repair the bank's tarnished reputation.

Sky News has learnt that Barclays has engaged headhunters to begin a search process in the coming months and has already commenced board discussions about the plan.

The news comes after another torrid week for Barclays, which began with revelations of the theft of customer data and was compounded by confirmation that it was increasing bonus payouts to 2.4bn despite a slide in profits.

A former deputy governor of the Bank of England, Sir David was parachuted into Barclays' boardroom in the wake of the bank's 290m fine for rigging the interbank borrowing rate, Libor.

Marcus Agius, Sir David's predecessor, offered to resign after the fine from regulators but was forced to remain for several months after Bob Diamond, the chief executive, was forced to step down by Lord King, the then Governor of the Bank of England.

Barclays declined to name the search firm which has been given the mandate to find Sir David's successor. MWM Consulting led the process which resulted in his appointment in August 2012.

Internal contenders for the job may include Sir Mike Rake, the deputy chairman, who was briefly in the frame during the last process.

The current president of the CBI, he is likely to step down as chairman of BT Group in the next 18 months but his chances of succeeding Sir David could be curtailed by the fact that he has already been on Barclays' board for six years.

Tim Breedon, a former Legal & General chief executive who now sits on the Barclays board as a non-executive director, may be another possible candidate.

Sir David is not expected to step down as Barclays' chairman until he has served for three years, taking him through to the summer of 2015.

Insiders said the fact that headhunters had been hired so far in advance of that date illustrated the difficulty of finding suitably-qualified candidates for bank chairmanships.

The role at Barclays would once have been among the most prestigious in British business, but recent controversies are expected to deter some external candidates.

The row over bonuses could be especially damaging for the bank given that shareholders injected almost 6bn last year to help shore up Barclays' finances.

As Sky News revealed on Friday, a number of City investors are furious about the hike in investment bank pay and are threatening to vote against Barclays' pay report at April's annual general meeting.

Sir David, who scrutinised a report for the City regulator on the near-collapse of Royal Bank of Scotland, has also served on the boards of companies including National Power and Legal & General.

Now 73, he will be anxious to ensure that his final year at the helm is characterised by some of the progress of remuneration and behavioural reform that he pledged when he took on the role.

Since replacing Mr Diamond, Antony Jenkins has pledged to make Barclays a stakeholder-friendly bank by boosting shareholder dividends and punishing employees whose behaviour does not meet exacting standards.

However, Barclays has continued to face legacy issues including a Serious Fraud Office probe into a rescue fundraising in 2008, and, like other banks, sizeable compensation bills for insurance and swaps mis-selling.

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