Charles Thomson: A day in the life

The Ombudsman is ready and the Government is on the phone – the culmination of many years of hard slog. By James Daley
Click to follow
The Independent Online

7.30am

It's Wednesday morning, and Charles Thomson, the chief executive of Equitable Life, is preparing for one of the busiest days in his seven-and-a-half-year stint at the helm of the ill-fated life assurer. In a few hours, the Parliamentary Ombudsman will publish the conclusions of her four-year investigation into the regulation of Equitable, in which she will find four Government departments guilty of maladministration, and call on the Chancellor to come up with several billion pounds in compensation for the million or more policyholders who lost money as a result.

With an apartment in the heart of the City, where Thomson lives with his partner and four-year-old daughter during the week, heading up to the family home in Ayr in Scotland for the weekend, his commute to work is only a five-minute walk. He concedes that running Equitable Life has had an irregular rhythm over the past few years, and that while some days he has time to walk his daughter to school, others – like today – leave him chained to the desk from early morning to the small hours.

Having joined Equitable back in January 2001, the month after its collapse, Thomson says the early years in his new job were about crisis management, followed by a period of a few years of "project management" – organising pay outs for victims of mis-selling, and trying to get the insurer back on a stable footing. The last few years, however, have been all about trying to strike a deal to sell the insurer.

So far, he has managed to off-load the Society's non-profit and with-profit annuity books to Canada Life and Prudential. The aim is to finalise a sale of the main £6.5bn with-profit fund to provide certainty for the insurer's remaining policyholders.

This has been the main focus of his work in recent months – and the Society is in talks with a number of potential acquisitors. Today, however, the focus is on the long-awaited Ombudsman report – and after signing off some regular business in the early morning, Thomson finally moves to the main work of the day.

12 noon

At midday, Thomson meets with both internal and external advisers to finalise their political, corporate and media strategy once the Ombudsman report is laid in Parliament in the afternoon. Having failed to win its £2bn case against auditors Ernst & Young and the Society's former directors in the High Court three years ago, Thomson knows that the Ombudsman provides the last realistic hope of winning compensation for policyholders.

With five hours of media phone calls ahead of him, he resolves to focus on getting two messages across to the media and, ultimately, Parliament. "We want the Government to accept this quickly because our policyholders have waited eight years," he says. "We also want people to understand compensation may not be everything they quite want. There are those that want to be compensated for investment losses. If the maladministration has caused their investment losses, then of course they should be compensated, but much more likely, the maladministration meant you bought an Equitable Life policy rather than a Standard Life policy, for example, and the compensation would then be the relative loss you've suffered."

Thomson is clear it should not be down to him or the Ombudsman as to how compensation is distributed. The Ombudsman has recommended an independent committee to calculate what would be fair for each group of policyholders.

1pm

Only time for a sandwich before calls with newspaper journalists kick off. Although the report is laid in Parliament at 2pm, it is embargoed from the media until one minute past midnight on Thursday, so TV interviews will wait until the following morning.

Although Thomson admits he's been on the end of some tough questioning from journalists, he says that this is a much happier experience. With the focus on the Government and his predecessors on the board, he's mainly charged with pointing journalists towards the juiciest parts of his report, and urging the Government to act quickly.

5pm

Economic secretary to the Treasury Kitty Ussher calls with the disappointing but expected news that the Government will not be formally responding to the final report until the autumn. Given that the Government has seen multiple drafts of the report already, and even provided responses to these, Thomson is frustrated by yet further stalling.

"I liken it to the forward who is arguing with the referee's decision," he says. "The Government had the report in draft at each stage of this process. OK, the final report is a bit different from the last draft, but it's probably 85-90 per cent the same. So they know what it says – and rather than accepting it, they want their lawyers to go through it – but that's what they did when they put in their submissions before February 2008."

In their earlier submissions, the Government has insisted that it can't be forced to pay compensation for regulatory failures over Equitable, as it will set a dangerous precedent. Thomson believes that in this case, their responsibility to pay is unquestionable.

"As the public, we pay for regulation," he says. "Not directly – the industry pays the FSA, but that comes out of the premiums we pay as the public. So we pay for the Government to put in place and enforce regulation. And I don't see why that's different from any other service if it doesn't fulfil its function. Regulation will never be 100 per cent secure. But this case was not about casual mistakes, it was about a decade of consistent regulatory failure."

6.30pm

With the press calls over, Thomson gets back to updating the Equitable data room with all the relevant information from the Ombudsman report. With a handful of bidders granted permission to pour over the books, Thomson is insistent they have every piece of information. Having overlooked one important document, Thomson and his team stay until 11pm, to ensure all documents are available for the release of the embargo.

Meanwhile, there's also work to be done for next week's board, audit committee and investment committee meetings. With 20 per cent of the with-profits fund's portfolio in equities and commercial property – hit heavily recently – Thomson says the investment team has a difficult job ensuring the fund emerges from the choppy markets in good shape.

There's no time for dinner. It's straight home to bed, ready for another heavy day. Tomorrow, Equitable will be on the front of almost every quality paper, and another day of interviews awaits.

The CV

Name: Charles Thomson

Age: 59

Marital status: Widowed by the mother of his two adult sons. Now lives with a partner, with whom he has a young daughter.

Education: Glasgow University, Mathematics

Career: Equitable Life, 2001-present; Scottish Widows, 1995-2000 (rising to deputy chief executive); Scottish Mutual, 1969-1995 (rising to deputy chief executive)

Comments