THE ANDREW DAVIDSON INTERVIEW: Martin Taylor

THE ANDREW DAVIDSON INTERVIEW: Martin Taylor - After the famous bust-up at Barclays, he put his great future as a CEO behind him and, when not advising Gordon Brown or railing against the euro, does the portfolio rounds at WH Smith, Goldman Sachs and else

by ANDREW DAVIDSON
Last Updated: 31 Aug 2010

After the famous bust-up at Barclays, he put his great future as a CEO behind him and, when not advising Gordon Brown or railing against the euro, does the portfolio rounds at WH Smith, Goldman Sachs and elsewhere. This brainy ascetic is as enigmatic as his CV

Martin Taylor looks a new man. Big smile, friendly handshake, chummy demeanour, strolling down the office tall and trim asking when I want to start, as if he has always been that kind of easy-going guy. He has on the dress-down gear to match his mood - open-neck knitted shirt, slacks, loafers, blue cord jacket slung over a chair.

Sorry? Is this the same young man-in-a-hurry who ran Barclays at the age of 41 and used to terrify many with his sombre suits and steelier intellect? Well, we're all a bit more relaxed now. Taylor, 49, has a portfolio career - non-exec chairman of WH Smith, adviser to Goldman Sachs, a clutch of directorships - and the change is clearly doing him good. He has also recently divorced and started a new family with someone rather younger than himself ... maybe it is more than just a change of office that has put a spring in his step.

I wish I'd had the opportunity to ask him, but at that stage I didn't know and Taylor wasn't about to tell me. He was seeing me on the hoof, anyway; he'd had to cancel the first appointment, had rung up later to apologise, said pop in tomorrow, he wasn't doing anything. The joys of portfolio flexibility.

If it's Friday, it must be Smith's. So there we are in his third-floor office in WH Smith's corporate HQ in London's Wigmore Street, informal as anything, small room, small desk, table, chairs, only the line of serious-looking books marching tirelessly across the windowsill giving a hint of personality.

Milk? Taylor pours my coffee and appears so genial that I am pinching myself. The last time we had met, at Barclays six years ago, he had been earnest, fast-talking, body tensed, crouched over my tape recorder, the sheer weight of running one of Britain's biggest firms seeming to bow him over. He had also shown signs of polite exasperation whenever I couldn't keep up. Everything was so complex, his intellectual rigour so sharp, his drive so unsparing that I found an hour in his company just made me feel a bit thick.

Taylor had started in journalism before moving into industry, and I had expected him to be more sympathetic. Others found him hard work too. As one of his former colleagues put it: 'Martin's great, but he is not the kind of guy you would go down the pub with.'

Then bang, three and a bit years ago, the golden boy suddenly walked from Barclays for reasons that have never quite been explained. Ructions over future strategy? Fallout with the chairman? Bored? Since then, Taylor, once hailed as the brightest young prospect in British management, has joined many other ex-CEOs in the portfolio routine, taking time off to advise Gordon Brown, sort out his family life and appear before the odd parliamentary select committee or two. He has also, perhaps unusually for a New Labour adviser, been an occasional campaigner against the euro, which he believes Britain would be mad to sign up to. Taylor, I suspect, is not loyal to any party line, simply to his intellect. Hence he is corruscating about matters he finds illogical, in a manner that many bosses would deem ill-advised.

That Friday, he was still recovering from the WH Smith AGM. Overall results at the retailer were fine - sales up to pounds 2.7 billion, stores worldwide now topping 1,500 - but there are blips in the US, with Smith's 600 outlets reporting a loss, and worries over long-term strategy. The shareholder response? Apathy, and, rather than being delighted, Taylor just looks peeved about it.

'Frankly, AGMs are a disaster. We had 30 shareholders coming, and we're pleased they came, but the average age was nearer 80 than 70. I mean, the meeting has no function. You could imagine it could have a function if the governance of the company was very bad, but ...'

He shrugs, his wide smile tightening into a grimace. His face is filling out with age but under the thinning flop of sandy hair, it still looks studiously boyish. Most chairmen, of course, are happy just to grin and bear shareholder apathy but that, it seems, is not in Taylor's make-up.

He says what he thinks and he thinks a lot. In a career that has spanned writing the Financial Times's Lex column as well as running Courtaulds Textiles and Barclays, it's probably got him in more trouble than people realise.

There is certainly a volatile restlessness about him that he is the first to acknowledge. It is the reason he cites for not becoming an academic despite sparkling academic success at school and university - 'Oh, I just can't sit still in libraries' - and is probably the reason he left journalism to work in industry. 'Actually, I was not that interested in news, really,' he says. And he wanted a change of scene. 'The thing that has driven me throughout my life is a fear of boredom.'

Is he easily bored? 'I was brought up to believe it is disgraceful to be bored, so it's almost the most shocking admission I could make to you, but the answer is yes. The great thing is that it makes you do things.'

It's why he loves his new portfolio career and why he was so determined, once he had left journalism, to rise fast up industry's greasy pole. Senior jobs are just more interesting. Oh, and he doesn't like being told what to do, either. 'I hate being told what to do, but unlike other people who hate being told what to do, I get no pleasure from telling other people what to do either.'

All of which makes you wonder how on earth Taylor became such an accomplished manager. He didn't want to do this, he didn't want to do that ... Like many able people, perhaps he just had too many choices. He grins. 'You might say my whole career has been doing things I am not, just a long series of impostures.'

Is it?

'Yes!' he laughs, and I can't really tell if he is serious, or not.

I'd bet he got used to pretending from an early age. Born the eldest son of a Burnley accountant, he was packed away to boarding school aged eight just a week after his father died of a heart attack. Prodigiously clever, he was sent to Eton on a scholarship four years later, the only member of his family to attend the famous public school, and probably the only boy in Burnley. His younger brother, now a solicitor in the town, would tease him about being a posh southerner.

'Being a Burnley-born Old Etonian is rather strange,' muses Taylor, 'but then I tend not to categorise myself as an Old Etonian. All these things provide a certain amount of information but you can look at me through many lenses. I have been lots of different things.'

Ah.

He describes his father's death as an 'enormously formative moment' in his life. 'I am not naturally very self-sufficient, but it made me more so.' It also, he says, made him both more sociable and more lonely. He was put up two years because of his academic prowess; by the time he was 10 he was working with 13-year-olds. Later, he was to use that prowess to take A-levels in Physics, Maths and Chemistry, switch to English at Oxford, hate that and flip to Oriental Studies and learn Chinese.

Those kind of fearless leaps were to continue through his business career. 'Maybe some of the terrors don't throw you so much because you have been through things that are so much worse,' he says, frowning. Why business? Part money - his family didn't have much - and part intellectual interest. He loves the complexity, although he is the first to acknowledge the pitfalls. 'Managers who are intellectually driven can be quite dangerous, of course, as they can pursue complexity for its own sake. And complexity is a terrible thing in business. The worst business I ever saw in my life was Barclays France in 1994, incredibly complex, structured to lose money in every way, but for the people who ran it, it was a source of endless fascination.'

He laughs. Barclays and Courtaulds, where he picked up 'the essentials of management', were diametric opposites. The textile firm was simple, unpretentious, easy to learn; the bank grand, complicated, full of flummery. When Taylor joined, Barclays had just posted its worst results for almost 300 years, a loss of pounds 244 million caused by bad loans and a recession squeeze. Within two years profits were back over pounds 2 billion and Taylor was being hailed as a management Wunderkind, even though he protested that much of the work had been done before he arrived. Three years after that, it ended in tears.

So what happened? Everyone knows he fell out with his chairman, Andrew Buxton - who also left abruptly - but why?

Taylor sighs. 'We just disagreed so fundamentally on very important things ... It took me a long time to realise that what I thought I was there for was not what a lot of the board thought I was there for. I thought I was there to make the business more valuable, and they thought the job was to make the business more glorious. That is the pursuit that many banks did follow. I just wanted to make it a bloody good business. And for the first three years there was no trouble,' he adds, 'the two objectives were perfectly aligned.'

And then, when Taylor decided he wanted to break up BZW, Barclays' investment banking business, all hell broke loose. 'The board didn't want to think about it. I wanted us to get out of investment banking. The only way we could make a go of it would be to buy a huge investment bank, back our way into it - and that just clearly didn't make sense. But the board was attached to this fantasy of a UK champion. It was absurd, absolutely absurd.

'And BZW itself was dishonest in the way it presented its figures to the parent board. I got rid of it because it was a bad business and was never going to be a good business and we were going to have a problem if we kept pumping money into it. It just had to be addressed. The board was asked to address it on one occasion and refused to.'

It was, he says, a fundamental clash between the shareholder value model and the old-fashioned establishment model. Which to follow? 'In the end, as they would see it, I more or less took the law into my own hands. What we did was carve out what we wanted to get rid of and kept the rest to build a new business, Barclays Capital, which has been a huge success.'

But the leaks started, casting doubts about his judgment, and the atmosphere soured. The real problem, he says, was that he just didn't think that the non-execs - including, in 1998, David Arculus (IPC), Mary Baker (MFI), Hilary Cropper (FI Group - now Xansa), Peter Jarvis (Debenhams), Sir Nigel Mobbs (Slough Estates), Sir Nigel Rudd (Williams) - knew enough about banking to sort out the firm's difficulties.

'We tried to explain,' he says, 'but they did not understand the industry and they were not competent to make choices about it, and as a board not of a high enough quality for a business of Barclays' strength.'

Not competent? Others see it differently, of course, and put the blame squarely on Taylor's manner. One who worked with him at Barclays says he handled the board badly - 'He looked at people and treated them as idiots.' There were also serious concerns about the way he managed and the pressure he was putting on himself. According to another former colleague, it comes down to Taylor's one weakness: people skills. Like many formidably bright individuals, he's reluctant to trust the judgment of others.

So how did he become acclaimed as a manager? Because, as former colleagues at Courtaulds attest, he was brilliant in the right environment. No-one ever doubted his people skills at the textile firm. But at Barclays, something clearly rankled. The delusions of grandeur? He certainly left with a low opinion of some of the senior staff there. 'Most of the people in Barclays who thought of themselves as bankers had not actually learnt anything about the industry for 20 years,' he sniffs. They thought an inexperienced 41-year-old CEO would be malleable. That's why they appointed him. They were wrong.

Did the experience put him off CEO positions for life?

'No,' he says, 'I had already decided I was not going to be a CEO again. I had done five years at Barclays and intended to do seven; I had been a CEO for 12 years by then. Just in sheer physical terms most sensible people wouldn't want to do more than that.'

Did it hurt having his reputation dented, going from hero to fall guy so rapidly? He bridles slightly. 'I knew I was being overpraised when I joined and underpraised when I left, but one reason for that was the great deal of lies and poison being put out by wicked, mediocre men. That didn't worry me. What I was worried about was what was going on in the business, as it made the job impossible to do.'

Was it hard choosing what to do next? No, he says. The WH Smith chair was a safe port in stormy waters. He was already a director and had sat on the committee that appointed Richard Handover as CEO of the retailer. The two work well together. Says Handover: 'I'm the operator. Martin is good at asking the awkward questions.'

Goldmans, who had been after Taylor for years, also stepped in. Taylor now works there as an adviser roughly two days a week, chairing their asset management business outside the US, and working with equities clients. He's a director of other firms too, many of them based abroad, as he likes to travel.

Is he paid a lot? 'Not much, but enough,' he shrugs. Over pounds 160,000 from WH Smith, more from others. 'I am rich enough to work because I want to, not because I have to.' He has famously ascetic tastes - lives in Kensington, no holiday houses, travels by Tube - so his living costs are not huge.

It also gives him enough time to devote to other projects, such as running Bilderberg, the controversial discussion group attended by politicians, academics and business bosses. Taylor is now secretary general of the organisation, which takes its name from the hotel where it first met after world war two with aims to 'increase understanding between Europe and north America'. Others have accused it of being an evil capitalist club bent on world power (I am not joking, take a look at the internet); the Guardian last year described it as a secretive clique.

'It's not secretive, it's private,' butts in Taylor sharply, 'but I wouldn't expect the Guardian to know the difference.' This spring's meeting will be in Washington. Yes, there will be demonstrators and heavy security, because of the government heads that will attend, but the group's detractors are just 'loonies'.

So if there is misunderstanding of the group's aims, why doesn't he PR it more effectively?

'Actually, I think that is the kind of sloppy thinking that gets people into trouble.'

Gulp. I wonder if the Bilderberg's American links have any influence on Taylor's views on the euro? Of course not. Nor have his stints advising Gordon Brown on tax reform and tobacco smuggling caused him to muffle his anti-euro sentiments. What a suggestion ...

'I will talk about the euro any time you want. We would be mad to enter.' He picks off the reasons: for the first time in years we have a working monetary policy in the UK; Britain gets more trade from being 'the outlier' beyond the eurozone; Europe is rent with unfinished constitutional business and immense tensions, it only works now because Germany is weak, once Germany is strong there will be huge problems ...

'And if you join the single currency, you give up the means to manage the economy, it's as simple as that.'

Better for business? Taylor almost sneers. 'Obviously, if you are a manufacturer of soap powder sold across Europe it would be convenient to sell it at one price, but what has your own convenience got to do with it?'

Does he think the Government will make us join? 'Maybe Tony Blair has a death wish, maybe he is attracted to the one thing in the world that can bring him down, I don't know. But Britain's good fortune in not joining the euro is considerable.'

He goes on to talk cogently about the lack of management skills at the heart of government, the obsession with spinning the present rather than planning the future, the ridiculousness of criticising business leaders who advise politicians - 'you get all this moaning about the public service ethic, then when you have people who aren't public servants displaying the public service ethic, people say it's unconstitutional!'

There is an edge of intolerance in his arguments, not of people but of their illogicality. At times he seems too highly strung, too wrapped up in issues that others don't spend more than a minute on. Yet when I move the conversation off business, to talk about how he spends his wealth or his leisure time, he becomes fidgety, getting up to check his e-mails, muttering about his password, glancing at the time. 'Are we there?' he asks, twice. His mood has swung. Eventually he ushers me out, relaxing again, chatting away about the photo shoot with Harry Borden in four days' time. He might have to go to Luxembourg - RTL, where he is a director, is being taken over by Bertelsmann - but don't worry, he promises, we'll get it sorted.

The next week, he's poleaxed by the flu, won't do the shoot and suggests we pull the interview. Whatever happened? Was he too frank about Barclays? Had I been digging too much in his private life? It was only after the interview that I learnt that Taylor, who has two grown-up daughters, had left his wife the year before last and now lives with Pippa Wicks, a 38-year-old Pearson executive who was formerly Courtaulds' finance director. It has been, others tell me, a traumatic time for him.

It seems strange, though, as he was so engaged and affable in the interview, that he had not mentioned it, especially as they now have a baby boy - my fault for not asking the right questions, perhaps. By the time I want to ask him about it, he's gone to ground. He confirms the facts by e-mail, says he has no problem with the personal details, but says he's been ill for some time, didn't feel great on the day I saw him and asks if I will come back and re-interview him. But it's too late for that. I hope he gets better soon.

< taylor="" in="" a="" minute="" 1952:="" born="" 8="" june="" in="" burnley.="" educated="" eton="" and="" balliol="" college,="" oxford="" 1974:="" financial="" journalist,="" reuters="" 1978:="" writer,="" lex="" column,="" financial="" times="" 1982:="" joins="" courtaulds="" 1984:="" director="" of="" courtaulds="" plc="" and="" md="" of="" courtaulds="" textiles="" 1990:="" ceo="" of="" courtaulds="" textiles="" after="" its="" demerger="" from="" courtaulds="" 1994:="" ceo="" of="" barclays="" plc="" 1997:="" heads="" task="" force="" advising="" treasury="" on="" tax="" and="" benefit="" reform="" 1999:="" becomes="" chairman="" of="" wh="" smith="" and="" adviser="" to="" goldman="" sachs="" martin="" taylor="" is="" also="" a="" director="" of="" the="" buttonwood="" focus="" hedge="" fund,="" the="" broadcaster="" rtl,="" the="" agrochemical="" firm="" syngenta="" and="" the="" biotech="" business="" antigenics.="">

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