Financial News

  • 19 February 2014, 21:54

RBS Board Begins Planning For Hampton Exit

Directors of Royal Bank of Scotland (RBS) have begun discussions about the appointment of a new chairman as Sir Philip Hampton prepares to step down from the taxpayer-backed lender.

Sky News can reveal that board members at RBS are discussing the framework of a process to identify a replacement for Sir Philip, who was parachuted into the bank in early 2009 as it fought for survival.

Insiders said that Sir Philip had yet to set a firm date for his departure but suggested that next year's annual meeting was a possible exit point.

External headhunters have not yet been appointed but are likely to be in the coming months, they added.

Leaving in May next year would coincide with the date of the general election, meaning that RBS's board is likely to seek a candidate who would be acceptable to all of the main Westminster parties.

The search for a new chairman will be led on RBS's side by Sir Sandie Crombie, the former Standard Life boss who serves as the bank's senior independent director.

However, RBS's unique status as a ward of the state means that UK Financial Investments (UKFI) and the Treasury will play an active role in identifying Sir Philip's successor.

Sir Philip said last summer that periods of between five and seven years were a natural tenure for chairman and chief executives.

A former chairman of J Sainsbury and one-time finance director of British Gas and BT, Sir Philip joined RBS alongside Stephen Hester, who took over as chief executive.

Sir Philip led the recruitment of Ross McEwan as Mr Hester's successor last year. Next week, RBS will set out a new strategy which will involve further shrinking its investment bank and substantial cost cuts.

One source said on Tuesday that it was possible that Sir Philip could remain at RBS beyond the 2015 AGM but that this was unlikely.

Among the candidates speculated about in the past have been Lord O'Donnell, the former Cabinet Secretary, although he lacks direct banking experience.

Penny Hughes, the non-executive director who chairs RBS's remuneration committee, is another possibility. If she were to be appointed, she would become the first woman to chair one of the major high street banks.

RBS's search for a new chairman will coincide with a hunt for a successor to Sir David Walker at Barclays. Sky News revealed at the weekend that Barclays has appointed headhunters to recruit a replacement for the 74 year-old.

RBS declined to comment.

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