On the money
The shareholder watchdog within the Association of British insurers issued one of its alerts a few days ago to remind companies that it does not like it when the chief executive of a company becomes its chairman.
The particular culprit they had in mind was Rod Kent of Close Brothers. What
made it unusual is that he has been away for four years and was coming back. But
they still did not like it.
There is no such ban on finance directors but perhaps there should be because
as a rule they make much better chairmen than they do chief executives.
Look how many finance directors turned CEOs there are among the high profile
FTSE 100 sackings of the past year or so.
Jonathan Bloomer at the Prudential was one, Richard North at Intercontinental
Hotels a second, and it was a similar story at Scottish Power.
Something in their approach trips them up as chief executives – they may find
it hard to provide the leadership, they don’t communicate with colleagues, they
get too immersed in detail.
Who knows? But as chairman they can use the skills they do have to rub along
with people they don’t particularly like, to grasp the totality of the business,
to understand instinctively where the problems may lie. That makes them often
very successful.
Anthony Hilton is finance editor of the Evening Standard