UK: DIRECTOR WANTED - BANKING EXPERIENCE AN ADVANTAGE.

UK: DIRECTOR WANTED - BANKING EXPERIENCE AN ADVANTAGE. - Twenty or 30 years ago it used to be common practice among major UK companies that at least one member of the board was a banker. He would be non-executive, typically in the later stages of - or im

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Last Updated: 31 Aug 2010

Twenty or 30 years ago it used to be common practice among major UK companies that at least one member of the board was a banker. He would be non-executive, typically in the later stages of - or immediately retired from - a successful clearing bank career. As Yve Newbold, chief executive of Pro Ned, says, 'He brought weight, gravitas and probity as well as his experience of financial matters'. In more recent years, banks and bankers have generally had a dismal time, and many would consider their esteem ratings rather lower than they were. Newbold is herself on the board of British Telecommunications, which manages to get by without a banking member.

Nonetheless a recent report (called European Boards of Directors Study) from head-hunters Korn/Ferry reveals that a third of Britain's boards still boast a banker. Not in all cases qua banker, however. 'It all depends on what you mean by banker,' says Robin Davies, company secretary of paper maker Arjo Wiggins Appleton which has no fewer than four directors with serious banking experience. They include chairman Cobb Stenham who left Unilever in mid-career to join Bankers Trust, and Ian Tegner who was once finance director at Midland Bank. 'In all four cases it's incidental,' Davies emphasises. 'We don't currently have a policy of ensuring there's a banker on board.'

Alistair Fleming, chief executive of Forth Ports, takes a similar view.

Although he's unwilling to say that he sees no need for a banker, that's what it seems to amount to. 'We look for experienced business personnel.

I don't think specific background is as important as the need for demonstrable experience. I would expect any leader of the requisite quality to be experienced in financial matters.' Forth's non-executive complement embraces oil, property and shipping, and an ex-chief executive.

Even at the commanding heights, the banker on the board may not be quite what he seems. Investment banker Sir Martin Jacomb (who left Kleinwort to help Barclays set up BZW) sits on Marks and Spencer's board. 'Sir Martin brings enormous knowledge and experience to the board's deliberations.

We don't have a policy of keeping a banker on the board,' replies company secretary John O'Neill. Sir William Purves, chairman of HSBC Holdings, is a director of Shell Transport and Trading. 'Yes Sir William is a banker,' says a Shell spokesman. 'And, before him, so too was Sir Robert Clark (chairman of Hill Samuel). We don't look for a banker, but senior bankers score well against the profile we do look for.'

In the small survey conducted by Management Today, only one company was unequivocal about taking a banker on board - a virtual banker anyway.

Northern Rock Building Society studiously avoids the word 'bank' when describing its plans to demutualise and list on the Stock Exchange next year. But it was his financial background that made Leo Finn, Northern Rock's deputy managing director, top of the list when Newcastle house-builder Bellway was looking for a non-exec last year. 'We borrow money, and so do our customers, and he knows all about lending it,' says Peter Stoker, a fellow Bellway director. The company has come a long way without a banker on board. Now that it has one, it may keep things that way. 'We probably would look specifically for a banker when Leo Finn retires, because we think the connection is valuable,' says Stoker.

Back at Pro Ned, Yve Newbold spells out what may be a critical distinction.

'I don't think, in my year at Pro Ned, that we've either been asked for a clearing banker, or suggested one on the basis of his background. But experience in the financial markets and of the needs of institutional investors is a commodity that plenty of companies want to have on the board. It's the investment bankers who have taken on the leading role.'

Banking may have changed, and bankers with it. But, one way or another, the banker on the board seems well entrenched.

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