THE HUMAN FACTOR

THE HUMAN FACTOR - A veteran of the boardroom such as David Verey might have been persuaded that he could work with Cazenove chairman Mayhew for a while longer.

by PATIENCE WHEATCROFT, business and City editor of The Times
Last Updated: 31 Aug 2010

A veteran of the boardroom such as David Verey might have been persuaded that he could work with Cazenove chairman Mayhew for a while longer.

It is almost impossible to detect from the outside how it feels to be inside an organisation. Companies that do business together are just as unlikely to reveal their true characters as individuals who meet on the formal social circuit. A chap full of wit and sparkle at the golf club dinner may be quiet and contemplative when he sinks into his favourite sofa at home. The woman who is politeness personified at every cocktail party may be hell to live with.

Businesses can have personalities as multi-faceted as individuals, and the one that prevails in dealings with the outside world may not be the one that dominates internally. Recent upheavals at the Queen's stockbroker, Cazenove, underline that message.

When City blue-blood David Verey left Lazards, where he had been ensconced for 28 years, to join Cazenove as deputy chairman, it was deemed near-perfect casting. Yet just eight months later a terse announcement from the firm's elegant townhouse HQ recorded his departure. In the City, where bids and deals have all but vanished, this was a rich source for speculation.

The formal statement that told of the failure of this piece of recruitment was of the 'more in sorrow than in anger' variety. 'We had different expectations of each other and we have agreed to go our separate ways,' said David Mayhew, the suave Cazenove chairman. One might have thought that two senior operators such as these, who had been on friendly terms for decades, might have been able to agree on those expectations before the contract was signed.

The comment that Mayhew made later was more telling: 'There were more cultural differences than we thought.' Although the two organisations represent the snootier ends of their trade, their roots are in different quarters of the City. 'We come from the market and David comes from the banking halls,' Mayhew told me.

The vision of this immaculately attired Old Etonian wheeling a barrow would challenge any cartoonist but, despite the butlers at the door and the plummy accents, the chaps at Cazenove hawk their wares as effectively as any stallholder in Petticoat Lane.

The City has undergone great change since the days when Verey and Mayhew began working there, and observers may see the distinction between brokers and bankers as purely historic. Since Big Bang hit, the big investment banks have become umbrella organisations for every sort of financial activity, with only the flimsiest of Chinese walls separating those that might harbour potential conflicts of interest. Lazards, however, has remained mostly a purveyor of advice. Yet it could not have achieved the success it did unless its people had an understanding of the market.

Nonetheless, the implication of Mayhew's words was that once he was inside Tokenhouse Yard, the Cazenove HQ, Verey did not feel comfortable with the organisation and neither did it feel comfortable with him.

Some believe there had been a disagreement over Verey's prospects at the firm. The theory was that his arrival as deputy chairman would bolster the board ahead of a flotation and that, once the business had gone public, Mayhew, the older by almost a decade, would retire, cashing in his shares en route, and Verey would glide into the chairman's role.

Nasty stock market conditions make a flotation look less of a certainty, but the firm insists that a spring sale of shares is still its intention.

Mayhew is indicating that he is in no hurry to depart. Whether he would have been had Verey been waiting to take over is a matter of conjecture, but he'd not given the impression that he was keen to quit the Square Mile just yet.

Verey may have had a different understanding. Yet even so, such a veteran of the boardroom might have been persuaded that he could work with Mayhew for a while longer, rather than cause a flurry by stalking out. Having left Lazards because he was unhappy with changes being imposed by the majority shareholder, Michel David-Weill, the privacy-loving Verey would surely have seen the merit of remaining deputy chairman of Cazenove for more than a few months.

So I suspect the clash of cultures was so drastic as to be intolerable.

A corporate culture cannot be accurately conveyed in mission statements; it has to be experienced. And it can change. At Marks & Spencer, for instance, there has been such a drastic rethink of how the business should operate that many of those who held senior roles under Sir Richard Greenbury's regime would now feel dreadfully out of place.

Cazenove has built up its culture over 180 years. It is smooth on the outside and sharp within. And clearly not to everyone's taste.

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