The final choice of Martin Taylor - not only an outsider but a non-banker - had the City positively rocking in the aisles with applause and the shares jumped 19p on the news. It was roundly hailed as a bold and radical choice.
But while Barclays captured the headlines, a survey by the Independent on Sunday shows that its action is not exceptional. Behind the scenes, a revolution has been taking place in British industry, with more and more companies opting for outsiders when it comes to making a change at the top.
Increasingly, boards and shareholders seek the 'culture shock' that stems from appointing someone who has earned his spurs elsewhere. If you want to get to the top, it may soon be necessary to switch companies.
Our comprehensive survey of boardroom moves at the top 1,000 publicly quoted companies suggests that the times have been unusually turbulent. In the past two years, 271 companies have experienced a change in the top post of either executive chairman, chief executive or managing director - 27 per cent of our sample. In some cases, there have been changes in more than one of these posts.
Some have resulted from the growing trend to split the roles of chairman and chief executive, in accordance with the Cadbury Committee report on corporate governance. But many reflect the recession, which has taken its toll on top management alongside middle management and blue-collar workers.
The statistics show a marked shift towards appointing outsiders. Of those surveyed 76 - or 26.5 per cent of those appointed - came from outside. This is still lower than the US where in 1993 35 per cent of all new chief executive officers were outsiders, but Britain appears to be catching up. So what motivates a company to bring in new blood?
The outsider has no vested interest in the old culture. In a company in need of radical change, that is bound to be an advantage. Outsiders can also breathe fresh air into an old organisation. The new broom owes nothing to anyone, can hire and fire without guilt and generally shake a company out of its rut.
But there are other, less dramatic, reasons for bringing in outsiders. According to David Morgan, managing director of M&G Investment Management, companies will often recruit externally merely because there is no existing internal talent. They might also do so where there are 'powerful divisional barons who might not be happy to see one of their number made king'.
Outbreaks of baronial feuding apart, a board may fear that the promotion of an internal candidate would unbalance the mix of an otherwise successful company.
But, most commonly, outsiders are brought in to bring about a radical change of direction. 'If the business needs a culture shock, it's much easier for an outsider to administer it,' Mr Morgan said.
A glance at the range of external appointments confirms this. Archie Norman, formerly finance director at Kingfisher, was hired to revive Asda, the debt-laden food chain, while John Cahill joined British Aerospace from BTR to aid the troubled defence and aerospace conglomerate.
They are not exceptions. In the past two years, Gerry Robinson has moved from Compass, the catering company, to Granada, where he has introduced stringent financial controls to the world of television; James McAdam has shaken up Ratners, now renamed Signet in the hope of removing the infamous 'crap' factor; Dr Morris Dixson has just taken over at Simon Engineering; and Roger Regan has gone in to salvage Spring Ram, the kitchens and bathrooms group.
Most of these managers will probably stay to reap the harvest of their efforts but a few, such as David James, currently chairman and chief executive of LEP Group, make a career of being corporate troubleshooters.
Some outside appointments are instigated by the board. It is often the non-executive directors who first flag the fact that a chairman or chief executive may not be up to the job, according to Martin Wood, director of interim management at PA Consulting. This is all very well when the non-executives are truly independent - witness the departure of Robert Horton from BP when the non-executives objected to his management style - but it is not so easy if the boss is a Robert Maxwell. However, if the first line of attack is the non-executives, these days there is increasingly a second - institutional shareholders.
'Institutional shareholders are becoming much more vocal about the failures of the incumbent management. If it doesn't shape up, it's got to ship out,' said Peter Breen, managing partner at Heidrick & Struggles, the executive search consultancy.
Communication between companies and institutional investors has improved out of all recognition. Many institutions have also developed their own research facilities. Michael Sandland, chief investment manager at Norwich Union, said: 'If institutional investors take the initiative, the alert may well come from within the board or from a company's brokers.'
Institutions are most likely to act where a company needs restructuring or refinancing. Mr Morgan said: 'If we, as an institution, feel a company is being badly managed and it comes to us for money, then we might insist on an external chief executive.' Nevertheless, most institutions see this as a rare and last-ditch resort.
Of course, institutional shareholders have long exercised the occasional boot behind closed doors, but John Rogers, Secretary of the National Association of Pension Funds Investment Committee, believes various changes have made their monitoring role more imperative. For instance, there has been a general shift from asset management to index-tracking, with a corresponding emphasis on maximising shareholder value.
The assets of pension funds have risen so much that they no longer have the flexibility to dispose of their holdings. 'Rather than sell and walk away from the problems, they are having to stay and sort them out,' Mr Rogers said. The 1,200 members of NAPS control assets worth some pounds 350bn, and many have stakes worth up to 5 per cent of a company's equity. Mr Rogers said that the Institutional Shareholders Committee had long had a stringent statement of best practice, and that much of it was imported lock, stock and barrel into the Cadbury Committee's report. NAPS, in turn, has a corporate governance checklist which is available to institutional subscribers. If they are dissatisfied with a company's rating, many of them write to complain.
Most companies have learned to pay heed to such warning shots. 'The institutions don't cower away like kicked dogs these days,' Mr Sandland said.
But, given the choice, they still prefer to promote from within. 'Going outside can amount to a pretty severe indictment of the home team. Moreover, the residual talent may decide to vote with its feet,' said Mr Breen, adding that companies sometimes feared an external candidate would fail to adapt to the culture. 'It's like the body's reaction to an organ transplant. There may be an implicit rejection of foreign tissue.'
The cost of bringing in an outsider may be yet another deterrent. The Government, for example, was forced to pay Lazards a very large sum when Sir Ian MacGregor was hired to sort out British Steel.
But the cost of not doing so may be higher. Torrie Smith, a specialist in executive appointments at Coopers & Lybrand, said: 'Lots of companies can't afford to get it wrong - and it may prove even more costly to appoint an insider.'
For a number of reasons, however, almost three quarters of the companies in our survey opted for one of their own band. In fact, the smoothest transfers of power often took place at the biggest companies, which had groomed their successors long beforehand. How many people even noticed when John Jennings took over from Sir Peter Holmes as chairman of Shell Transport & Trading?
Tony Greener joined Guinness as a non-executive in 1986, just as the share support scandal hit. In its wake, he assumed an executive role and in January 1993 took over from Anthony Tennant as chief executive.
In July 1993, John Jennings took over from Sir Peter Holmes as chairman of Shell T&T. The event passed without comment, as the oil major handled the transfer with characteristic smoothness.
Rocco Forte inherited the chairman's mantle from his father in 1992, but the City was critical of his decision to remain chief executive as well. Rocco said two strong managing directors would keep him in check.
Peter George came up on the inside track and in September ran off with the red rosette - as Ladbroke's new chief executive. Not an obvious front runner, he enjoyed the backing of his predecessor, Cyril Stein.
Archie Norman took over as chief executive of Asda, in December 1991, after John Hardman was ousted. Norman's name was enough to secure the group a pounds 357m rescue rights issue.
Bill Rooney, founding chairman of Spring Ram, lost the battle to keep his position in September. Unhappy with numerous profits warnings, the insitituions finally brought in their own man, Roger Regan.
The 'luvvie' brigade was in uproar when Gerry Robinson took over as chief executive at Granada in November 1991. Robinson introduced tight financial controls at the television, leisure and catering group.
Where there's muck, there's David James. Now at Lep Group, the crisis-ridden freight and security firm, James specialises in corporate salvage operations. Lep is the fifth such resurrection job he has tackled.
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