Split in Pru board over the new boss

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The Independent Online
WHEN Peter Davis officially begins tomorrow week as chief executive of Prudential Corp- oration, Britain's largest insurance company, he will be uneasily aware that a significant minority on his board is opposed to his appointment.

The Independent on Sunday has established that his appointment was resisted by members of the Prudential's appoint- ments committee.

The committee consisted of the group's non-executive directors and included Mr Davis, although naturally he took no part in selecting himself.

Other non-executive directors on the selection committee included Unilever's Niall Fitzgerald, Sir Trevor Holdsworth, the former boss of GKN, Andrew Teare of English China Clays and Michael Abrahams, the non-executive chairman of Dalepak Foods.

As a member of the selection committee, Mr Davis had an inside track in putting himself forward.

Some of his co-directors showed a clear preference for other contenders, but Mr Davis had the strong backing of Sir Martin Jacomb, the group's incoming chairman.

One candidate preferred by some Pru directors was Michael Hepher, group managing director of British Telecommunications and a former director of Lloyds Abbey Life between 1980 and 1991. A source close to the committee of non-executive directors said that there was a lot of internal discussion about the appointment and that some directors were clearly unhappy about the final choice of Mr Davis to succeed Mick Newmarch, who left the company after clashes with some of the City's regulators. "The concern was at two levels," said the source. "First there was unease about the fact that Mr Davis has had no experience of the insurance industry; second, there was a concern shown by some that given there are so many complex structural changes happening in the industry at this particular point in time, any outsider would find it hard to get to grips with them."

Sir Martin, who led the selection process, stated: "If anybody on the board had significant reservations, I am certain that they would have expressed them to me."

He added that he thought Mr Davis was the obvious choice who has "all the right qualities needed for the task in good measure".

Mr Davis was ousted last June as head of Reed Elsevier, the publishing group.

At the time of the approach from the Prudential, Mr Davis, who was on holiday last week, was heading a management team that was close to securing a £300m-plus buy-in of Reckitt & Coleman's foods and beverages businesses.