Standard Life's new chief looks to fill key vacancy

Published on Monday 19 October 2009 21:03

DAVID Nish, who was confirmed yesterday as Standard Life's new chief executive, is expected to make the appointment of a head of UK life and pensions a key priority and will not be pushed into pursuing acquisitions.

His appointment ended a long search for a successor to Sir Sandy Crombie and analysts pounced quickly with questions about his strategy for the Edinburgh-based company.

There were indications that he would hire someone quickly for the life and pensions role, which Crombie has undertaken alongside his other duties since Trevor Matthews left to join Friends Provident nearly two years ago.

Some say it is "odd" the position has been left for so long, but now a chief executive has been chosen, it is thought the recruitment of more board members – and a replacement for Matthews – will fall into place.

Chairman Gerry Grimstone, yesterday declined to comment, but sources say this will be one of Nish's first moves. Grimstone did say that the company had no intention of seeking acquisitions and did not see itself as a target.

"We are not configured as an acquisitions machine," he said. "We would look at something we thought we could take advantage of, but it will not drive strategy. We do not have to make acquisitions to grow."

Nor does he see Standard Life as a target for predators. "That is very unlikely. We have good support from our shareholders," he said.

Some observers have questioned the time it took to find Crombie's successor. Marcus Barnard, an analyst at Oriel Securities, said: "It took quite a long time to find someone who was next door."

But Grimstone said the search had been thorough and worthwhile in proving they had the right man. There had been a long list of 20 candidates, reduced to eight or nine who were "seriously interested". The final shortlist included candidates from Australia, France and the United States. He flew to New York and France to meet applicants.

But concerns remain about whether the board needs strengthening.

"Most companies have the heads of their main individual divisions on the board. Standard Life doesn't. There is certainly a gap," one analyst said.

Deputy finance director Jackie Hunt is widely tipped to replace Nish on the board as finance director.

Grimstone declined to confirm whether Keith Skeoch, head of Standard Life Investments, had been a contender for the top job. But he is said to be happy to stay in his current role.

Concerns remain over Nish's lack of experience in the increasingly fraught UK life and pensions sector. Although he is seen as "capable" and a "safe pair of hands", there is little indication as to what direction he will take the group.

Recent moves to sell Standard Life Bank were largely seen as an attempt by Nish to streamline operations. He got a taste of handling big corporate transactions at his previous role as finance director of ScottishPower – where he was a key player in the 4 billion acquisition, and later disposal, of US energy division PacifiCorp. He also led Standard Life's successful pitch for the BT pensions mandate.

With his background as a chartered accountant, Nish is seen as a strong numbers man. And, as a result of Crombie's decisive action to rescue Standard Life a few years ago, analysts estimate the group is in a strong cash position – with a potential excess capital pot of about 1bn.

But Barnard said that, despite Grimstone's assertions, Standard Life may become ripe for a takeover.

"Its current market share is probably not enough to make it a dominant force on its own. There are gaps in its product line-up, particularly protection and distribution," he said.