Wilson has a confidence rebuilding job to do
THE appointment of Mark Wilson as chief executive of Aviva plugs an embarrassing gap for Britain’s biggest insurer which has been searching for the right candidate since parting company with Andrew Moss in May in a highly-publicised row over his pay packet.
Remuneration, however, was only partly to blame for his departure. Aviva has been dogged by internal wrangling on a number of issues, thought to have included concerns, shared by the Financial Services Authority, over its capital position.
The new man arrives having revitalised AIA, the Asian operations of AIG, which involved focusing on core operations. This has clearly caught the eye of Aviva chairman John McFarlane and suggests a further period of upheaval as his appointee pursues a restructuring agenda that is already under way.
It involves selling 16 underperforming businesses that tie up more than a third of its capital but contribute just 18 per cent of operating profit.
On top of that, the company has been hit by its exposure to a weakened continental Europe where it derives 40 per cent of operating profit. Its dependence generally on mature, low-growth western markets is clearly an issue for the new man to resolve.
The shares are off their year low but continue to underperform and the company is worth half its value when Moss took over in 2007. Although the financial crisis hardly helped, the company suffered from the deteriorating relationship between the chief executive and shareholders.
Wilson needs to restore confidence among investors that will be best achieved by showing the leadership skills which led to him being hired.
Garrick surprises more than just MPs
SIR Ron Garrick, a grandee of the Scottish business community, told MPs this week that the HBOS board was the best he had ever served on and that he would join it again.
After the mauling the bank has received over its part in the crisis of 2008-9, it was not the sort of sentiment that the parliamentary commission on banking standards would have expected to hear.
Garrick, an industrialist best known for heading Weir Group for 20 years, joined Bank of Scotland in 2000 and remained on the board through the merger with Halifax until 2009. He was deputy chairman and senior independent director, so he had first-hand experience of the rise and fall of a Scottish institution.
His support for the board – which he described as being open, transparent, of high intellect and integrity – hardly chimes with the commonly held view of a business in meltdown after its reckless approach to lending.
Either Garrick knows something the rest of us are still to discover or he is in denial.
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