Sir David Walker, chairman of FTSE 100 bank Barclays, has taken fellow City of London grandee Sir John Peace to task over his commitment levels, publicly questioning how Sir John manages to balance his chairmanship of Standard Chartered with his other high profile commitments. Referring to Sir John’s other roles as chairman of Burberry and Lord Lieutenant of Nottinghamshire, Sir David said in a recent interview with the Financial Times: “I don’t know how John Peace has done it.”
Sir David was the author of 2009’s Walker Review of corporate governance at UK banks, which recommended that “the chairman of a major bank should be expected to commit a substantial proportion of his or her time, probably around two-thirds”. However, Sir David’s views in this regard have apparently hardened in the interim, the Barclays chairman having identified this as one of the areas he would change if he were to write the report today, telling the Financial Times that “
The UK Corporate Governance Code’s predecessor, the Combined Code, previously recommend that an individual should not serve as the chairman of more than one FTSE 100 company; however in 2008 this provision was revised to a more general principle that all directors should ensure they have sufficient time to discharge their duties. Glass Lewis has long highlighted Sir John’s extensive commitments as an issue of concern, and welcomed his stepping down as chairman of a third FTSE 100 company, Experian, during the year. However, Sir John’s commitments levels are not the only reason he has hit the headlines this year.
As well as marking the conclusion of his chairmanship there, Experian’s 2014 annual general meeting (“AGM”), held in July, played host to the third remuneration-related shareholder rebellion in as many months at companies chaired by Sir John. Investor concerns focused on the board’s decision to appoint longtime CEO Don Robert rather than an independent candidate as Sir John’s successor, a significant deviation from UK Code recommendations. Only a week earlier he had presided over Burberry’s AGM, where 52% of shareholders declined to support the fashion house’s advisory remuneration report. Both revolts came on the back of that at Standard Chartered where, in addition to the bank’s remuneration policy being opposed by 41% of shareholders, five directors received less than 90% support. Despite being the public face of each of the aforementioned revolts, Sir John himself successfully garnered over 97% support for his reelection at each of Burberry and Standard Chartered.
The renewed focus on Sir John’s commitment levels comes at a time when large banks and other financial institutions are reportedly finding it increasingly difficult to recruit non-executive directors amid ever increasing regulatory burdens and associated workloads, and it is within this context that we expect to see continued shareholder focus on Sir John’s commitment levels in the coming year. As one top 25 investor at Burberry put it earlier this year: “As an investor, it is better to have a chairman who is solely concentrating on one company. Sir John arguably has too many fingers in too many pies.”