The Bank of England is searching for a new chairman of its Court and has brought in headhunters for an appointment which will herald the next stage of the revolution taking place at the 319-year old City institution.
The hunt is on for a successor to Sir David Lees, who is due to stand down as non-executive chairman of the Bank’s governing body next summer. Sir David, the former chairman of GKN, Tate & Lyle and Courtaulds, will have held the job for five years by then after agreeing to stay on for an extra six months to help new Governor Mark Carney ease himself into the job.
Sir David is not the only pending departure from the Court. Two more long-serving directors, the boss of Lloyds Bank in Scotland, Lady Rice, and Sir Roger Carr, the outgoing Centrica chairman, are also due to step down next year.
The Court was criticised during the financial crisis for being too unwieldy and has since slimmed down. Under Sir David, its first chairman, there has been a drive to make the Bank more accountable and introduce checks and balances that bring it into line with the board of a large FTSE 100 company.
At the same time, the Bank’s remit has been greatly expanded, with City regulation returning to it following the disbandment of the Financial Services Authority, as well as a new financial stability oversight.
However, Sir David’s changes have not stopped departing members of the interest-rate setting Monetary Policy Committee, including Adam Posen and David Blanchflower, from taking a swipe at the Bank’s culture, raising concerns that directors did not do enough to rein in the all-powerful Governor.
The Bank came under a fire a year ago when one of three independent reviews commissioned to examine its activities during and after the financial crisis questioned the robustness of internal governance. While the report acknowledged that “less senior staff are often willing to challenge their superiors... there appears to be some tendency for them to filter recommendations in such a way as to maximise the likelihood that senior staff will find the recommendation palatable”.
Sir David’s post has already been advertised by the Treasury, with applications due a week on Friday. There is a 60 per cent pay rise for the successful candidate, who will receive £48,000 for the part-time role compared to the £30,000 it currently offers.
It is thought that the £15,000 currently paid to non-executive directors could be lifted for new recruits to bring it closer to the fees received by non-executives in the private sector.
The pace of change has stepped up at the Bank in a busy first three months for Mr Carney. As well as laying out his plans for forward guidance on interest rates that will remain rock bottom until unemployment falls to 7 per cent, the Canadian has launched a consultation on introducing plastic banknotes to Britain and confirmed Jane Austen as the next face of the £10 note. Former Santander banker Charlotte Hogg has also joined the Old Lady of Threadneedle Street as chief operating officer.
Paul Tucker, the Deputy Governor who was edged out for the top job by Mr Carney, leaves the Bank this week to become a senior fellow at Harvard Kennedy School and Harvard Business School.
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