Back in April I alluded to the pressures Sir Fred Goodwin, the CEO of the Royal Bank of Scotl
and was facing. Goodwin has for a long time been considered a terrific CEO. Then the credit crisis evolved and he too became ensnared in the difficulties facing many other banks. Goodwin has found himself under increasing pressure from shareholders as RBS began seeing cracks in its invincibility. In fact, the bank recently announced its first loss in forty years as a public company. As the pressures grew Goodwin and the bank’s current chairman, Sir T
om McKillop found themselves forced to make room for for some new blood on the board. According to a story by Julia Kollewe in theGuardian,
Royal Bank of Scotland has strengthened its board with the appointment of three non-executive directors, including the deputy chairman of Northern Rock, in a move designed to pacify investors.
Stephen Hester, who is also the chief executive of property group British Land, will join the RBS board when he steps down from Northern Rock on October 1……. John McFarlane, a former Standard Chartered and Citibank executive, and Arthur Ryan, the former chairman and chief executive of US financial services firm Prudential Financial, will also join the RBS board as non-executive directors on October 1. Last year McFarlane retired after 10 years as the chief executive of Australia and New Zealand Banking Group. Ryan retired from Prudential Financial in May. He previously spent 22 years at the former Chase Manhattan Bank, where he served as the chief operating officer and vice-chairman and also ran the worldwide retail bank.
Speculation has been heightened with the selection of the above three new members that Hester may be in line to succeed Goodwin. Keep a close eye on RBS and the moves made over the next number of months. Management remains on the hot seat and cannot afford to make more mistakes.For more:BloombergMarketWatchManagement TodayFT Alphaville
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