Change of style at Barclays: Martin Taylor will bring an outsider's approach to the clearing bank. Patrick Hosking reports
Sunday 22 August 1993
By Friday, the conservative garb had been doffed in favour of a designer suit, chambray blue shirt and a colourful, flowery silk tie. Mr Taylor might be an advertising executive or a fashion entrepreneur, but never in a million years could he be a clearing banker.
Deliberately or not, Mr Taylor, a youthful-looking 41, was sending a message to employees at the bank's Royal Mint Court headquarters that a new broom had arrived at Barclays. But while his clothes were shrieking change, the man was much more reticent, giving few clues as to how he sees the job: 'It's going to be a slow burn. I don't believe I can go into a job like this and make flash and ostentatious decisions. I've got an awful lot to learn. But I would hope there would be some advantage in looking at the bank as an outsider.'
He could hardly be more of an outsider. He spent eight years as a financial journalist, first with Reuters and then on the Lex column at the Financial Times. He was then recruited by Sir Christopher Hogg at Courtaulds, the chemicals group, where he spent the next 11 years, ending up as chairman and chief executive of the demerged Courtaulds Textiles.
He is the first to admit he has no experience of banking. The closest he has got to Barclays is the current account he opened with the bank when he was 13. But his time at Courtaulds has won him a strong City following, and Barclays shares shot up by 4 per cent when his appointment was announced.
His management philosophy at the textiles group may give a few clues to how he will manage when he formally arrives at Barclays in January. (He plans to divide his time between the two companies in the meantime and joins the Barclays board in November).
'We spent a lot of time trying to push responsibility and accountabilty down the management hierarchy. I also believe in hierarchies becoming flatter. I just don't believe in people being miles and miles and miles away.'
But while Mr Taylor is enormously admired by shareholders and analysts, there are some in manufacturing who regard him as one of those responsible for the decimation of the British textiles industry in the 1980s. During his time at the head of Courtaulds Textiles, he closed 20 out of the company's 23 UK spinning mills, axing thousands of jobs.
Stephen Howard, the former head of corporate consulting at pre-demerger Courtaulds, describes Mr Taylor as 'very, very strong at getting through to an understanding of the business and creating an environment in which that can surface'. He adds: 'He is very analytical - a driver of initiatives.'
'But,' he continues, 'I believe Courtaulds Textiles gave up too early in UK textiles production. Martin identified niche core businesses well, but I think he could have stayed in bulk textiles as well.'
Whether he needed to be so ruthless or not, his handiness with the axe is certain to stand him in good stead when he comes to trimming down the bank's huge branch network. The bank last year cut 6,400 from its workforce and closed 189 branches. It has plans to cut a further 9,000 jobs and 350 branches over the next two to three years.
What no one disputes is the size of Mr Taylor's intellect. According to one of his former bosses: 'He's very quick witted, very alert and one of the brightest people I've ever met. He's not afraid of making tough decisions. He's immensely capable. Initially at Barclays he'll succeed, because of his inordinate charm.'
Mr Taylor believes many of the principles he applied at Courtaulds are equally applicable to Barclays.
He dismisses the notion that banking is all that different: 'The way that some people talk about the culture of the clearing banks . . . you'd think they (bankers) were an entirely different species of people.'
Barclays made a pounds 242m loss before tax last year and cut its final dividend after billions of pounds of loans, many to property developers, turned sour. That performance hardened City resolve against Andrew Buxton, forcing him to agree to split his dual role of chairman and chief executive.
The search for a chief executive took eight months and was led by Sir Denys Henderson, chairman of ICI and a Barclays non-executive director. After looking unsuccessfully in America, the head hunters settled on Mr Taylor.
In one sense, he has timed his arrival well. Analysts believe the worst is over for Barclays. In the first half of this year, it bounced back to a profit of pounds 335m, although it is still recording a poor return on capital.
But there remains a question mark over how well he will fit in among clearing bankers, most of whom have spent their entire working lives at Barclays and many of whom are his senior in years.
Some analysts believe Mr Buxton has done a brilliant conjuring trick, placating institutional investors while retaining most of the power. They think that Mr Taylor could be bypassed, sandwiched between Mr Buxton and heads of Barclays' three main operating divisions. 'What is his job? We don't really know yet,' one City analyst said. 'The big fiefdoms within Barclays may yet defeat Taylor's attempts to carve out a job for himself.'
Pressed on who ultimately calls the shots, Mr Buxton replied: 'The board, chaired by myself, runs the group.'
But Mr Buxton and Mr Taylor dismiss the possibility of any serious disagreement arising between them. Ironically it was the Lex column, Mr Taylor's alma mater, which suggested that the two might come to blows if and when Mr Taylor starts sacrificing sacred cows at Barclays.
'I look at the positive and I don't even consider the negative,' says Mr Buxton. Mr Taylor says he would not be joining if he expected a boardroom struggle: 'I'm not a manager who relishes conflict. I think the business is going to be a welcoming place.'
But the conservatism and rigidity is bound to cause him some problems. After all, this is the bank where, Mr Buxton recalls, as a young man he dared to go into work one day wearing a pink shirt. His uncomprehending boss was heard to utter, 'Is it some kind of a joke?'. The clothing rules have been relaxed a little since then. But Mr Taylor is likely to discover that some of the attitudes have not.
Additional reporting by David Bowen
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