LSE surprises City with choice of oil man as new chairman

The London Stock Exchange has turned to the oil industry to find a new chairman to replace Don Cruickshank who will step down in July.

The institution said Chris Gibson-Smith, who worked for 31 years at BP, had agreed to take the job after several months of negotiation with Whitehead Mann, headhunters appointed by the LSE to find a new figurehead for the 202-year-old institution.

The appointment confounded the bookies and other City observers, who had speculated that favourites to take the job included people with a higher profile in the Square Mile, such as Brian Williamson, the chairman of Liffe, or Paul Myners, the former chairman of Gartmore. Mr Gibson-Smith acknowledged that he was not a "City grandee", but added that his career path fitted well with the LSE's changing role.

"The exchange has been in almost constant evolution, the final part of which was becoming a plc. It is a plc in a very competitive international world and I have spent my life in that world."

After being one of BP's five managing directors since 1997, Mr Gibson-Smith left to take on the role of chairman at the National Air Traffic Services, where he brokered a £130m Government bail-out of the institution.

In 2001, Mr Gibson-Smith's final year at the oil giant, he took home £2.5m, including cashing in £1.3m of share options, and is due a BP pension of £420,000 a year. The 57-year-old will be paid £250,000 as chairman of the LSE.

Clara Furse, the LSE's chief executive, insisted Mr Gibson-Smith fulfilled all of the criteria the institution had been searching for in a new chairman. "The board was looking for a senior business figure with success at operating on the international stage and with a strong knowledge of technology. So Chris's appointment was an obvious one," she said.

Ms Furse claimed that the appointment of Mr Cruickshank, the dour Scot who used to head up the telecoms regulator, was the first breaking of the mould at the LSE. Before Mr Cruickshank the exchange had been headed up by City establishment figures such as Sir John Kemp-Welch, a former partner at Cazenove.

Mr Gibson-Smith remained tight-lipped on the vexed question of whether the LSE would be stepping up its attempts to sign a major acquisition or merger on his watch.

"I will wait and see. I am not deeply enough in yet and it depends on the specifics of the deal," he said.

Ms Furse and Mr Cruickshank have come under fire for failing to nail a deal. Their most damaging miss is thought to have been the failed attempt to buy London's financial derivatives exchange, Liffe.

LSE shares moved up 3.25p to 303.25p yesterday.