Walker rides to the rescue at Barclays

After nose-diving in the wake of the Libor scandal, Barclays' shares rise again on the news that City grandee David Walker is to become the bank's chairman.

by Elizabeth Anderson
Last Updated: 23 Aug 2012
In an effort to quickly fill the void after a string of Barclays’ top executives quit in the wake of the rate-rigging furore, 72-year-old City grandee Sir David Walker will replace the outgoing chairman Marcus Agius in November.

Agius announced his departure early last month just days after Barclays admitted manipulating the Libor interest rates and was slapped with a £290m fine. Chief executive Bob Diamond also resigned and COO Jerry del Missier’s departure swiftly followed.

With its top three executives gone, Barclays’ chance of a quick recovery was looking shaky. Walker’s appointment has therefore gone some way to reassuring troubled shareholders who have watched the stock price plummet by as much as a quarter in recent months: shares rose 1.2% as the City welcomed the news that one of its own is the take the helm of the beleaguered bank.

Walker is a former Bank of England and Treasury official who authored the Walker review of banking, one of the most significant governance manuals for UK banks. He has a 50 year career in the City and also has investment banking experience, having chaired Morgan Stanley for seven years. His credentials for adding some gravitas to the shell-shocked Barclays board are thus impeccable.

Walker hasn’t been afraid to speak up on the improvements banks need to implement. His report called for more engagement with shareholders and for bank chairmen to stand up to chief executives. CEOs who are untouchable, he said, were a major source of risk for banks. He also called for greater transparency on pay, including details of how many executives earn more than £1m.

All these recommendations might help Barclays’ recovery efforts. A chairman who is not afraid to change strategy, hinting that pay could be cut and its culture improved is just what the bank needs, analysts say. But first he's got the hire the next CEO...

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