Long goodbye to LV duo: Mutual has snubbed its members by not ousting its failed bosses sooner, says ALEX BRUMMER
Liverpool Victoria looks to have learnt very little from its chastening setback at the hand of its members in December.
The campaign by the top team to sell the historic friendly society to private equity barons Bain Capital failed.
Instead of the clean break with the existing bosses – necessary if confidence is to be restored – LV has appointed an interim chairman, Seamus Creedon from the existing board. Chief executive Mark Hartigan, meanwhile, architect of the failed plan, remains at the helm.
Instead of a clean break with the existing bosses, LV has appointed an interim chairman, Seamus Creedon from the existing board
LV members who refused to back the plan by chairman Alan Cook and Hartigan can breathe a sigh of relief that talks on a previously rejected merger with fellow mutual Royal London are still on.
Whether one can have full confidence in Creedon to conduct the negotiations with sufficient speed and independence is a matter of conjecture. Unlike Cook (tainted by his work at the Post Office), he has a credible CV.
This includes a role at respected Edinburgh fund managers Baillie Gifford. But there is no escaping the fact that he was one of the nodding dog directors who was willing to disregard the heritage of LV and allow it to fall into the hands of Bain, despite fierce criticism from MPs and this newspaper.
Members were to be betrayed for a feeble £100 mess of pottage. To put the meagre payout in context, that is just one-seventh of what households will have to pay in April when the cap on energy bills comes off.
What is most troubling is that Hartigan is still in charge in spite of extracting a salary and bonus of £1.2m in 2020. He had the potential to have earned many more millions should the Bain deal have completed.
During the course of his unsuccessful and expensive campaign to railroad members into private equity ownership, he accused potential partners Royal London of ‘lobbing a grenade into the deal.’ Hartigan’s military background may have taught him to play hardball, but it is not an outburst which will make it any easier to reach a satisfactory deal with Royal London chief executive Barry O’Dwyer.
If they were bigger people, Cook and Hartigan would have recognised the reputational harm being done to the concept of mutuality and stood aside with immediate effect last year, making room for a City or insurance grandee to re-negotiate with Royal London. The delay shows a lack of humility and insensitivity to the best interest of 1m policyholders.
Building back better
Too often, corporate bullies are allowed to get their own way. So Irene Dorner, chairman of housebuilder Taylor Wimpey, deserves credit for defying activists Elliott in the choice of Jennie Daly as chief executive.
Elliott wanted an outsider. Taylor Wimpey benchmarked Daly against outside candidates and defiantly chose the company’s operations director.
The addition of another woman chief executive to the FTSE 100 is to be applauded, especially in the male bastion of construction.
It is further recognition that female bosses have the right problem-solving skills in difficult corporate jobs such as banking and in the troubled water industry.
Daly has big shoes to fill after the 15-year sojourn of Peter Redfern, who steered Taylor Wimpey back from the brink of collapse.
He shrewdly took the opportunity to strengthen the company’s balance sheet during Covid with a £500million rights issue, used to add to its land holdings, while prices were off the boil.
The housebuilders need a new image. They have been scarred by fat cattery, the escalation of the leasehold scandal, shoddy construction and the cladding disaster.
There is a real opportunity to up governance standards. Over the longer haul that could be a rich legacy for Daly.
When will it all end? Credit Suisse seems to be permanently in the naughty corner.
Its financial errors range from the securitisation of Greensill supply finance to huge exposure to the collapsed Archegos Capital hedge fund.
On top of this, it has experienced extraordinary governance failings ranging from alleged espionage by former chief executive Tidjane Thiam to Covid rule breaking by displaced chairman Antonio Horta-Osorio.
In the latest imbroglio, it finds itself in a Zurich court fighting charges of laundering of cocaine cash for a former Bulgarian wrestler. More Ozark than Swiss.