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Monday 26 January 2015

INVESTORS URGE STANDARD CHARTERED TO REPLACE BOSS

Peter Sands, the boss of emerging markets-focused Standard Chartered.

Standard Chartered’s two largest investors have told the bank’s chairman, Sir John Peace, to find a replacement for the embattled chief executive, Peter Sands, within months.

The Telegraph has learned that Temasek and Aberdeen Asset Management have said a succession plan to replace Mr Sands must be put in place so that he can leave by the end of the year.

It is understood both investors, who between them own nearly a third of the bank’s shares, have made their wishes known separately in recent weeks. Singapore’s Temasek is Standard Chartered’s largest shareholder, holding a 17.7pc stake. Aberdeen is second with almost 11pc.


The revelations follow months of speculation after a dramatic downturn at the Asian and African-focused bank which Mr Sands has led for the last 9 years.

The bank has been hurt by a slowdown in growth in some of its key markets plus specific problems at its Korean arm.

It is thought that investors have failed to identify an internal candidate to replace Mr Sands. The deputy chief executive, Mike Rees, is thought unlikely to be in line for the role, while the chief financial officer, Andy Halford, only joined the bank last summer from Vodafone with no prior banking experience.

Late last year Aberdeen chief executive, Martin Gilbert, appeared to back Mr Sands on the record, suggesting he should be given a chance to execute his turn-around and cost-cutting strategy.

The moves comes despite a recent investor day in which Mr Sands detailed a significant cost saving programme, and committed to axing most of its global equities business and cutting 4,000 jobs in its retail banking arm.

Investors have also questioned Sir John’s tenure – he has been chairman since 2009 and is also chairman of fellow FTSE 100 constituent Burberry – but are understood to have said it is his responsibility to find a new chief executive.

Non-executive director Naguib Kheraj, Barclays’ former finance director, is the most likely option to replace Sir John from the current board, but an external chairman may be recruited.

It is thought that if Sir John does not act, investors will ask him to step down to make way for a new chairman who will then oversee the executive succession. Some have questioned whether he has the time to chair two FTSE 100 companies, particularly as one is a bank with the size and complexity of Standard Chartered.

At the same time, Sir John is known to be in the process of a partial board refresh to buy some time. The names of at least one, possibly two new non-executive directors are understood to be with City regulators for vetting. The refresh is thought likely to see some directors step down.

Stanhope chairman Oliver Stocken has been a non-executive since 2004, while senior independent director Ruth Markland, a former Freshfields partner, has been on the board since late 2003.

Under corporate governance guidelines, a non-executive director is no longer deemed independent after nine years. However companies are able to keep directors on if they explain to investors the reasons for doing so.

Mr Sands has spent much of the last week at the World Economic Forum in Davos, where he chaired a breakfast on global finance with speakers including the Bank of England governor Mark Carney. Sir John also spent time in Davos, as did Mr Rees.

The three men were due to host an off the record media roundtable on Friday, but Sir John pulled out in order to meet overseas clients.

On Mr Sands’ tenure, a Standard Chartered spokesman said: “Our previous statement is unchanged, Peter is focused on executing the refreshed strategy and has the support of the board in doing this”. On new non-executive directors, he added: “The chairman announced a multi-year refresh of the Board in 2011, and we will make any further announcements on this in due course.” 


The Telegraph

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