Having stepped down from her role only weeks ago as Virgin Money’s £1.7 billion takeover by Clydesdale Bank parent CYBG completed, Gadhia now contemplates the emotional aspect of handing over the reins of the firm she was key in launching nearly a quarter of a century ago.
She praises CYBG chief executive David Duffy, but laughs when recounting how she told him that “I suspect it’s a bit like I shall feel when I marry off my daughter – he’s very handsome, he’s got very good prospects, but he’s probably not quite good enough”. But, she stresses, “of course he is, and I’m delighted that he’ll be running the business and expanding it going forward”.
The bank was launched with backing from Sir Richard Branson and Norwich Union, which later sold its stake. Other milestones en-route have included acquiring the “good” part of Northern Rock after it hit the wall, floating in 2014 (the same year Gadhia received a CBE), and the latest deal that has created the sixth-largest lender in the UK with more than six million customers and assets of about £84bn. Gadhia sees the transaction as “a great deal at a good time… it will create a bigger bank that I hope can give more customers better service for many years to come – so I’m really proud of what we achieved there”.
Last Tuesday she was named Leader of the Year at the Lloyds Bank National Business Awards. Previous recipients include ITV boss Carolyn McCall in 2015 during her time at the controls of EasyJet, and Moya Greene, then chief executive of Royal Mail, the previous year. Gadhia says she was “super-honoured” and surprised by the accolade, which saw her pip to the post names such as Tom Bloomfield, chief executive of digital bank Monzo, and Dame Helena Morrissey, founder of the diversity-focused 30% Club. “I genuinely – no false humility – didn’t expect to be the winner out of that amazing bunch of people, most of whom I know,” Gadhia says. “It’s really nice from my point of view that this has come just at the time that the Virgin Money chapter of my life has closed.”
She had told the judges that when Virgin Money was set up, “we coined the phrase, ‘we aim to make everyone better off’ – to not just do the best things for our shareholders, staff, local communities and customers – but for all of them together because, in my view, if you can create a holistic approach to business you get a better outcome and more success”.
The Clydesdale brand, which dates back to 1838, will disappear with the move to Virgin Money branding – a situation Gadhia says is similar to when Northern Rock was taken over. At the time she was “really quite concerned about how all of those people might feel about us taking on their favoured brand”, but within months customers and staff were keen to “move forward” and change over to the new name.
“And that’s what will happen, I think, with Clydesdale over time,” with Virgin Money seen as “something new, something different, something progressive – and actually everybody’s up for that in the world of banking”.
Gadhia’s experience navigating the sometimes rocky terrain of banking is explored in detail in her autobiography The Virgin Banker, published last year. It includes her arrival at what is now EY in the 1980s to train in accountancy (“I hated it”), later moving to Norwich Union, then working with Fred Goodwin at Royal Bank of Scotland (RBS) between 2001 and 2006, before a timely decision before the crisis hit to take up Branson’s offer of returning to Virgin.
She notes in the book how she questioned various practices at RBS such as accounting and HR methods, and took a prescient aversion to payment protection insurance.
Gadhia also highlights the sexist attitudes she has faced over the years, and the UK government in 2015 asked her to lead a review into the representation of women in senior management in financial services.
To date, more than 270 firms have signed up to the Women in Finance Charter, with pledges including setting internal targets for gender diversity in senior management, and moves to link directors’ bonuses to meeting such goals.
But one FTSE 100 boss gave a surprising response when she asked why his firm had not joined in. “He looked at me and said ‘there are just not enough good women’ – I was so shocked.”
By the end of the day she had been signed up to talk to his organisation, but says more efforts are required to make sure people cannot dismiss half of the population in this way.
She also said earlier this year that she was going to change her name to Dave after a study found there were more FTSE 100 bosses with this name than females.
But joking aside, she is adamant that what is required is to give people opportunity, change the culture and drive a requirement for diversity, for the benefit of business and society as a whole. “And whatever happens, I will continue to bang that drum forever.”
Indeed, in a sign of progress still to be made, a report published the same day Gadhia received her award urged FTSE 350 companies to do more to meet the target of a third of women in senior leadership positions by 2020 after it emerged that almost a quarter have only one woman on their board, and five are all-male. And Gadhia is passionate about business fostering diversity “in all of its richness”, not just in terms of gender but people from all backgrounds to reflect society. Everyone needs to be heard equally, treated fairly, and “able to be themselves at work and in life”. When that happens, “I honestly believe you unlock so much potential in every individual that the organisations that they operate within are impossible to hold back.”
Such inclusion encompasses mental health, and Gadhia in The Virgin Banker gave a frank look at her own experiences, detailing her “severe” post-natal depression, for example.
She also notes her admiration of Lloyds Bank boss António Horta-Osório, due in part to the work he has done – after checking into the Priory to deal with exhaustion – to instigate processes at the lender to help people manage their own mental health and support others. “The more that is talked about and executed in the business environment and more broadly, the better society we’re going to have.”
There has also been speculation that Gadhia, who is continuing at Virgin as a senior adviser to Duffy for up to 18 months, could be a successor to Horta-Osório. But she insists that she hasn’t yet nailed down her next move, although “going plural” – and picking up a string of non-executive director roles – is definitely not on the cards.
One or two are possible, “but I definitely feel that I’m young enough and have enough energy and experience, frankly, to continue in some form of executive role, and who knows exactly what that is – I haven’t worked that through yet”.
As for the possibility of stepping deeper into political waters, “I’m not likely to be party political, but I’m very keen to contribute to policy thinking”, pointing out her work with the Scottish Government’s Financial Services Advisory Board. The organisation, she says, is “making sure that fintech is really supported in Scotland and I think that’s a really good financial and economic development for Scotland for the future – it will create jobs and will create new opportunities”.
Scotland’s financial and fintech industries – which Gadhia describes as “vibrant” – contribute £7bn to the UK’s gross domestic product, according to Scottish Development International.
Gadhia was keen to grow Virgin Money from Edinburgh rather than London, a decision supported by Branson, and Scotland remains her base. When flying up from London City Airport, “as soon as I look down and I can see the bridges [over the Firth of Forth] as we come into land, I know that I’m home”.