Standard Life yesterday signalled the end of an era when it announced its managing director, Scott Bell, would retire in March after working for the quintessential Scottish mutual life assurer for more than 40 years.
Also leaving the company is Mr Bell's long-term colleague Jim Stretton, chief executive of Standard Life's UK operations. Mr Stretton, who will retire in December, is leaving at age 58 so he could step down at about the same time as Mr Bell, who will be 60 later this year.
The change of Standard Life's leadership was likely to spark renewed speculation about its future, as an increasing number of mutual organisations take the decision to renounce their member ownership. Rumours have been circulating in the life assurance sector that Mr Bell had told senior colleagues that Standard Life could demutualise, but not during his remaining tenure.
With the departure of Mr Bell and Mr Stretton, the company's board structure will change so that Iain Lumsden, its 55-year-old finance director, will take over as chief executive. Sandy Crombie, chief executive of Standard Life Investments, will be deputy chief executive.
Mr Lumsden was at pains yesterday to stress his continuing commitment to mutual ownership. "It would cost members £1bn to demutualise. I would rather cope with the carpetbaggers, which in the last vote cost £10m," he said.
The changes at the helm of Europe's largest mutual life assurer do not represent an influx of new blood. Both Mr Lumsden and Mr Crombie have worked for Standard Life since they left college in the 1960s. But Mr Lumsden, who will formally take over on 16 March, hinted yesterday that his leadership style would be slightly different from that of the famously dour Mr Bell.
"I'm not going to say it will be very different – we have been part of the same management team for years. But I am a different type of person. I suspect I'll be a little more approachable than Scott," he said.
He also alluded to plans to change the internal structure of the business. Standard Life now has a clear division between its UK and overseas arms. This is unlikely to continue under Mr Lumsden.
Standard Life a year ago succeeded in fighting off an attempt by the Australian businessman Fred Woollard to end its member-ownership.
While Standard Life won the vote comfortably, it was shaken by the assault and by critics' accusations that it was arrogant and hardly contacted members until it had to fight demutualisation.
Mr Lumsden yesterday conceded that the company's biggest challenge is still to convey its pro-mutuality message more effectively.
He said the company was already "writing to everyone, and forming focus groups. Virtually everything we do is coloured by focus groups."
The two departing executives will receive generous pensions, which will be two-thirds of their final salaries. Their payments for 2001 are not public, but in 2000 Mr Bell received a basic salary of £495,000, and Mr Stretton was paid £365,000.
Mr Lumsden said he did not know whether he would be paid more than Mr Bell has been, because the company's remuneration committee has still to decide his and Mr Crombie's new salaries.Reuse content