But, Did The Northern Rock Board?
Northern Rock Chairman Resigns After Lawmaker Attack
By Sebastian Boyd Oct. 19 (Bloomberg) --
Northern Rock Plc replaced Matt Ridley
three days after lawmakers asked the chairman why he was "clinging to office'' following the first run on a U.K. bank in more than a century.
Bryan Sanderson, CBE, a former chairman at London-based Standard Chartered Plc, will replace Ridley, who offered to resign in September when the bank was forced to seek emergency funding from the Bank of England, Northern Rock in a statement today. Sanderson, 67, was chairman of Standard Chartered until November 2006.On Oct. 16, members of parliament blamed Ridley and other directors of Newcastle, England-based Northern Rock for failing to recognize the risks of the bank's strategy, in particular their over-reliance on debt markets to fund mortgage lending.
"You're chairman of the bank that ran out of money; caused the first bank run in this country for 150 years; you've had to borrow billions of public money from the Bank of England; you've damaged the name, the good name, of British banking,'' Conservative Party member of parliament Michael Fallon told Ridley on Oct. 16. "Why are you still clinging to office?''
Ridley told lawmakers his resignation was available if demanded. Northern Rock said it asked Ridley, 49, to stay on until he had appeared before the committee of U.K. lawmakers.
....
Sanderson spent most of his career at BP Plc, where he was CEO of its chemicals unit. He was chairman of Standard Chartered for three years to 2006 and is chairman of health insurer BUPA.
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Friday's action by the Northern Rock Board begs two questions and a comment:
First, where is Sir Derek Wanless' resignation?
Given the negotiations on the sale of Northern Rock, one can understand why Adam Applegarth cannot resign, at this moment, but is there any reason that can be given for keeping Sir Derek on the Board? Given his testimony, on 16 October, before the Select Treasury Committee where he proved, beyond a reasonable doubt, that he did not have a clue about modern Risk Management ("We were stress testing plausible scenarios."), Sir Derek lost any credibility to stay in the post of chairman of the Northern Rock Risk Committee. If he will not, "do the honourable thing" and resign, he should be removed immediately.
Second, why did the Board chose Mr. Sanderson?
Whilst we cannot be certain, it is unlikely that there was a very long list of the willing, much less the willing and the able. In Bryan Sanderson's own words, he agreed to it because "It is important for both the reputation of the City of London and for the north-east, where I was raised. I think it's a job that has to be done, and it's an important one." A prosaic answer, but not a bad start; unfortunately, Mr. Sanderson kept on speaking - "If this had been Cornish Rock, I would not have done it."
As reported in the Financial Times, "Mr Sanderson’s move into such a high-profile situation is a surprise, given his age. He stepped down from his role at Standard Chartered last year because he was tired of the incessant travel and official functions."
In a bio-piece, entitled, Bryan Sanderson's Working Day, printed in The Sunday Times of October 17 2004, we were provided with some further insight into the new Northern Rock chairman:
"The Standard Chartered chairman wakes at 5.30am in his north London home and starts the day listening to the BBC World Service, making a cup of tea.
“I start slowly,” says Bryan Sanderson. “I think about what I am going to do during the day.” He is collected by a driver at 7.20am and is at work before 8am, unless he has a breakfast meeting.
His schedule is plotted out for up to nine months in advance. An average day at Standard Chartered will involve meetings on forthcoming deals, relations with governments or internal issues. Every day will also involve a work lunch of some sort. More meetings will follow and evening events. “If there is something later, then I will sneak off from the office at 4pm, and have a two or three-hour break,” says Sanderson."
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With all due respect to Mr. Sanderson, is a 67-year-old, over-tired, chemical expert, whose apparent major claim to the position is not his three years as the chairman of Standard Chartered, but rather his "northern roots," the right man for this demanding job?
Perhaps I should give him his due: if he can apply those same masterly diplomatic skills that he invoked in his acceptance interview to gratuitously insult the people of Cornwall to pound some sense into the skulls of his fellow board members and his management team, he may prove his value to the employees and customers of Northern Rock.
We will watch and wait.
Cassandra
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