Jeremy Warner's Outlook: Agius fits Barclays hand in glove, just so long as they can sort out his Lazard's position

BP: Under attack on all sides in America; iSoft postscript: Seeing the big picture
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The Independent Online

Barclays seems finally to have come up with a halfway decent solution to the problem of the chairmanship, a long-standing bone of contention for Britain's third largest banking group. By agreeing to stand down early to return to the bosom of his family back in Canada, Matt Barrett, the present incumbent, makes way for a veteran financier and pillar of the City establishment who will fit the role hand in glove - Marcus Agius.

Having recently overseen the £11bn sale of BAA to Ferrovial of Spain, Mr Agius appears to be available and looking for a suitable job. On the face of it, there could rarely have been such a happy coincidence of circumstances. Only, of course, it is not strictly speaking true to say Mr Agius is out of a job. The one fly in the ointment is that he is still deputy chairman of Lazard Frères and in effect chairman of the investment bank's UK operation, a role he would have to vacate to become chairman of Barclays.

The potential for conflict of interest would make it impossible to hold the two positions in tandem. Both banks have substantial fund management operations, Lazard advises a number of competitor banks to Barclays, and the two would be bound to find themselves from time to time on opposing sides of corporate takeover activity.

Apologists claim the conflicts could be managed, and that in any case the Barclays investment banking operation - Barclays Capital - is a wholly different business from Lazard. The first is a capital markets business, the second an advisory operation. Yet what happens when Lazard is advising on the defence against a company being bankrolled by Barclays? It won't wash. Mr Agius would find it hard to hold down both jobs; he'll have to decide on one or the other.

The alternative to Mr Agius is Bob Steel, who is already on the board of Barclays and is a former Goldman Sachs bigwig. Yet according to City gossip, he's being wooed by his old boss at Goldman Sachs, Hank Paulson, who recently became US Treasury Secretary.

Former Goldman Sachs' partners find it difficult to cash in the fortunes they inherited when the company floated on the stock market. Crossing the divide into politics is one of the few ways of making a completely clean exit, as the rules of high office in the US, which require that all such financial ties are severed, will always override any stock lock-in.

Mr Agius is not yet a done deal, but it is to be hoped he soon will be; Sir Nigel Rudd, more than willing to step into the breach should the need arise, would be an excellent interim chairman, I'm sure, but it makes for a much neater outcome to have the incoming and outgoing chairman coincide.

As for Mr Barrett, it wouldn't altogether surprise me if he wasn't going at all. He pulled the same trick when he stepped up to become chairman. As the moment of his retirement from the chief executive's suite approached, the Irish-born Canadian was widely reported to be fed up with his lonely existence in London. In any case, he didn't relish the largely ceremonial and corporate governance role of the chairmanship. Then all of a sudden, it was the reverse. Far from being desperate to go, he'd have "to be beaten out of London with a stick".

Yet it was never an entirely satisfactory arrangement, and as generally happens when a powerful boss becomes the chairman, it has been difficult for his successor as chief executive, John Varley, to find his head. Undoing the former CEO's work is not exactly easy when he's sitting there as chairman.

Nor, by all accounts, has Mr Barrett particularly enjoyed his his new role at Barclays, where he is forced to be low profile almost to the point of invisibility. That cannot be comfortable for someone who used so much to court the limelight. He's wholly responsible for all that goes on, but he's got none of the power of decision making and implementation.

There's no reason to think this departure is down to some terrible bust-up or disagreement over strategy. By common agreement, the Woolwich acquisition, which Mr Barrett was responsible for while CEO, was a mistake which was subsequently compounded by poor management. There has also been a more generalised problem of underperformance in the UK retail bank. Both these weaknesses are being addressed.

Yet in the round, the strategy of expansion in capital markets through Barclays Capital, in combination with selective acquisition making in Africa, India and the Iberian peninsula, looks sound. If he takes the job, Mr Agius will not be joining a bank in urgent need of reform.

BP: Under attack on all sides in America

BP seems to have spent most of the past year busily proving the old truism that, when things start to go wrong, everything goes wrong all at the same time. The seemingly endless torrent of bad news is mainly confined to the company's US operations, but even here in the UK, we've had the unseemly row over Lord Browne's retirement date - clear evidence, some would say, that here is a company out of control and adrift at the helm.

The latest shock comes in the form of news that Federal investigators are examining possible manipulation by BP of crude oil and gasoline markets in the US. Coming on top of the Texas City oil refinery explosion, disrupted production from the company's Alaskan oilfield in Prudhoe Bay, and separate allegations of widescale manipulation in the US market for propane, it all adds up to a whole lot of trouble for an organisation once seen as a textbook example of efficiently managed corporate calm. All of a sudden, the company is being hung out to dry. In the US at least, BP has come to be seen as the public face of Big Bad Oil, a profiteering foreign interloper which makes a convenient scapegoat for a nation's fury over the pain of the ever onward and upwards march in oil prices.

The company's hope is that the mid-term elections will change the shape of Congress and draw the political sting out of the present assault, much of which is Republican led and electorally motivated. Yet this may be no more than wishful thinking.

The present furore is hardly without cause. For many Americans, Lady Bracknell's famous observation immediately springs to mind. To misquote horribly, the first time may be a misfortune, the second looks like carelessness, the third negligence and the fourth and fifth are barely printable.

Few are prepared to believe this is just a run of bad luck. At the same time, however, BP is suffering the peculiarly American fate of a public lynching, and this is almost certainly a largely unfair over-reaction. BP is probably right in believing that given time, the turbulence will pass; attention will turn instead to some other hated representative of big, bad business.

The fact that, despite these troubles, the company is coining it as never before may, on the other hand, no longer be the saving grace it once would have been. For many Americans, it just further aggravates tempers. These days, companies cannot rely on being merely profitable; they need to be loved too.

iSoft postscript: Seeing the big picture

Post Enron, the scandal that finished off Arthur Andersen, you might have thought auditors would be more alive than ever to the dangers of false and misleading accounting. So how come iSoft slipped through the net?

Part of the answer may lie in a growing plethora of rules and regulations, some of them contradictory or at least divergent, which allow accountants to believe that provided the letter of a particular standard or set of rules has been met, then the accounts are in order.

Ironically, the only thing investors and creditors really want to know, which is whether the accounts offer a "true and fair" view of what's going on, may be getting buried beneath a mountain of box-ticking, post-Enron, mumbo-jumbo. In their attention to detail, auditors may be losing sight of the big picture.

j.warner@independent.co.uk

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