Coup or cock-up? Diamond and Hurd appointments spark backlash

Both Barclays and Oracle will have to face down vocal opposition over their latest controversial appointments...

by James Taylor
Last Updated: 19 Aug 2013
Will Barclays live to regret appointing Bob Diamond as CEO? The bank's share price actually dipped when the news came out yesterday, possibly because investors knew what the public reaction would be. Sure enough, there's been plenty of grumbling from Whitehall about his elevation to the top job. In truth, Barclays didn't have much choice - Diamond was the obvious candidate for the job in all sorts of ways. But it won't make external relations (a much bigger part of Diamond's new job) any easier. Equally, although Oracle may think it's pulled off a coup by hiring ousted HP boss Mark Hurd, the reported lawsuit from his old employer reminds us that he won't be a straightforward appointment...

Business Secretary Vince Cable has been the highest-profile minister to comment on Barclays' decision. And although he was a lot more circumspect than he presumably would have been six months ago - he didn't say anything about Diamond personally, and stressed that 'it isn't my job to appoint the head of a private bank' - he did suggest the choice 'illustrates the wider policy question about how banks can be made safe, and... this combination of the casinos and the traditional banks.' By appointing one of Britain's richest investment bankers (and a very cheesy-grinning American one at that), Barclays is making a tacit admission of the power these casino capitalists still wield in the City.

It's hard to dispute Diamond Bob's credentials. He's built Barclays Capital into a global powerhouse, and thanks to the bargain-basement acquisition of those Lehman assets, it's arguably emerged from the crunch in an even stronger position than before. Internally, he's been Varley's heir apparent for years - and although he can't be that familiar with the retail operation, he presumably knows Barclays as a whole better than any external candidate would.

Nonetheless, it's hardly the most diplomatic or political choice by Barclays, particularly at a time when the industry is under scrutiny by the Government. Perhaps it's just decided - probably correctly - that the politicians aren't actually going to be able to do anything in practice, so there's no point worrying about it.

Speaking of diplomacy, Oracle's decision to recruit ex-HP boss Mark Hurd also looks set to provoke a fight between the two companies. Oracle investors are happy because they think Hurd can help their company beat HP at its own game (hardware), while HP investors are unhappy for precisely the same reason. Hence, presumably, a HP lawsuit to try and block the move, according to today's FT.

Something to think about for Thorntons, perhaps, which apparently is on the verge of naming a new chief exec to replace the outgoing Mike Davies. These appointments can generate good PR and give an ailing business (an adjective that's definitely applicable to Thorntons, given its profit warning in May) a bit of positive momentum. But if you hire the wrong person, it can generate the wrong sort of publicity. Let's hope Sir Fred Goodwin isn't on the shortlist.

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