Leading candidate pulls out of race for RBS chairman’s job

http://www.theguardian.com/business/2015/jan/30/rbs-chairman-job-lord-smith-ruled-out

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Plans to install a new chairman at Royal Bank of Scotland ahead of May’s knife-edge general election have had a setback after one of the leading contenders pulled out of the race.

The bank and the chancellor are in a race against time to find a successor to replace Sir Philip Hampton in the three months that remain before polling day with George Osborne taking an active interest in the shortlist being drawn up by the bank. Treasury sources said Osborne had been taking a back seat but intends to interview all the candidates personally.

One front runners for the job, Lord Robert Smith, a peer and former banker who conducted the review of Scottish devolution, is said to have ruled himself out of the race.

He is among those linked to the post, including: Dame Alison Carnwath, the chair of Land Securities; Gus O’Donnell, a peer and former head of the civil service; and Sir Howard Davies, a former regulator. All declined to comment or could not be reached.

Sir Sandy Crombie, the most senior non-executive director at the bank, is leading the appointment process, despite rumours that he is also a potential candidate. The bank has appointed headhunters Egon Zehnder to conduct the search to replace Hampton, who has been chairman since 2009, shortly after the government stepped in to prevent the bank collapsing. He is set to become chairman of pharmaceutical company GlaxoSmithKline later this year.

The bank has said that Hampton will leave once his successor is found and there have been concerns that it will be difficult to convince a candidate to take on the role before the outcome of the general election. But there are suggestions that the bank hopes to fill the position before its full year results at the end of February.

Chairing RBS is arguably one of the most politically charged role in business given the large government shareholding in the bank – just under 80% – and the annual row over bonuses in its investment banking arm.

Neither the last Labour government, which bailed out RBS, or the coalition have sold off any shares in RBS, which has been the subject of a number of strategy reviews, involving selling out of businesses and scaling back its investment banking division.

But earlier this month Osborne appeared to indicate that a share sale could take place soon after the election. He said: “Early in the next parliament we will have to make a decision on the timing of any exit programme from RBS ... It is not good for taxpayer value or for the competitiveness of our banking system to have such a large and complex bank in state hands for too long”.

Hampton has been chairman of RBS since its £45bn taxpayer bailout, joining in 2009 from UK Financial Investments, the new body set up to manage the taxpayer stakes in the bailed out banks.