Northern Rock finally replaced its embattled chairman Matt Ridley yesterday, announcing that he had stepped down in favour of Bryan Sanderson, the former chairman of Standard Chartered, who will now steer the bank as it tries to secure its future or find a bidder.
Mr Ridley has faced repeated criticism for allowing Northern Rock to pursue an aggressive business model and being ineffectual during the run on the bank last month.
When MPs accused Mr Ridley on Tuesday of "clinging to office", the bank's senior independent director, Sir Ian Gibson, revealed that Mr Ridley had offered to resign twice. Mr Ridley said he would only stay on as long as he was of use to the bank.
Even before the crisis, Mr Ridley was seen as an odd choice to be chairman of a fast-growing bank. The Newcastle-born aristocrat is a science journalist and author, whose works include The Red Queen: Sex and the Evolution of Human Nature. His father, Viscount Ridley, sat on Northern Rock's board for 30 years, and was chairman from 1987 to 1992.
Sir Ian said: "I want to thank Matt Ridley for his hard work as chairman since 2004 and particularly for his commitment during the very difficult circumstances of the last few months."
Mr Sanderson will replace Mr Ridley as soon as the Financial Services Authority approves his appointment. Northern Rock said he had the right combination of political, business and cultural qualities to guide the Newcastle-based bank through the tricky months ahead.
The 67-year-old is one of the great and the good of the North-east. He was chairman of Sunderland Football Club before it was bought last year and is also a director of Durham Cricket Club and chairman of Sunderland Arc, a regeneration project. He also has close government links, having headed the Learning & Skills Council. He chaired Standard Chartered, the Asia-focused bank, for more than three years.
Mike Trippitt, at Oriel Securities, said: "There is now some stability at Northern Rock but they need to move on to the next stage quickly and they need someone who is detached from the whole thing who can lead negotiations with the Government and regulators."
Mr Sanderson spent most of his career at the oil company BP, where he rose to be a director and run the chemicals business. He became chairman of Standard Chartered in 2003 and served until last November when he was abruptly replaced by Mervyn Davies, who was then chief executive.
Mr Sanderson left the details of Standard Chartered's business to Mr Davies, preferring political work such as co-chairing the Government's Asia Task Force. He was also known to be strong on governance issues and received credit for strengthening the bank's board. He is not said to be planning a mass cull of senior management such as Adam Applegarth, the chief executive, preferring to minimise disruption to the business.
Northern Rock is being prop-ped up by the Government, with the Bank of England providing £16bn of funding. The Treasury has agreed to extend its guarantee of deposits to new savers to give the bank a chance of gaining extra retail funding for its business. But that guarantee runs out in February, when it would fall foul of European rules on supporting companies. Mr Sanderson, therefore, has only a few months to secure a deal to sell the bank or secure its future as an independent company.
A takeover would be complex because of the massive funding needed by Northern Rock's business. An offer from either of the bank's main suitors, Virgin Money and JC Flowers, is not expected for some weeks.
Northern Rock shares closed down 8.6 per cent to 186.9p.Reuse content