Commentary: Unclean break at Barclays

The good news from Barclays is that Andrew Buxton has responded to shareholder concern and made clear he is prepared to split the roles of chairman and chief executive after all.

The bad news is that any changes in management structure will be made only after Mr Buxton has been installed as chairman and chief executive in January.

Barclays insists that 'nothing is cast in stone'. After receiving comments from institutional shareholders - not pressure, mind - the bank has said it might now appoint a new chief executive after Mr Buxton becomes chairman, or give the power to sack the chairman to a committee of non-executive directors.

The bank deserves credit for responding to shareholders' concern, but the suggested solutions won't work.

The worst idea is to put things off until January. This is barely a month before the bank unveils its results for 1992, and it will have enough on its plate deciding how much to provision against property bad debts and whether to cut the dividend, without having another top management upheaval to deal with.

Also the suggestion that a group of non-executives should be given power to dismiss the chairman seems odd. Surely the board already has that power.

It seems certain that Mr Buxton is determined to hang on to the chairmanship, and it is nearly impossible to see him remaining simply as chief executive. And the board would place itself in an impossible position if it now did a U-turn and went for a different chairman.

There is another problem. Barclays has two other powerful chief executives in David Band, who runs investment banking, and Alastair Robinson, in mainstream banking. They won't want another layer between them and the top.

One solution would be to make Mr Buxton executive chairman and recruit a chief operating officer on the American model, a chief executive in all but name. There would be plenty of well-qualified candidates, most obviously Brian Pearse, the former Barclays finance director drafted into Midland by the Bank of England to turn it around. Mr Pearse won wide praise for his success at Midland, and following the Hongkong takeover he may feel surplus to requirements.

Time for Mr Buxton to make a call.

Comments