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Chairman makes an early exit after disaster at RBS
3 Feb 2009Shamed banker Sir Tom McKillop today finally quit as chairman of Royal Bank of Scotland — almost three months earlier than expected.
He was due to leave the troubled bank at the annual general meeting on 29 April, but today made way for J Sainsbury chairman Sir Philip Hampton.
McKillop was held responsible for the downfall of RBS along with former chief executive Sir Fred Goodwin, who was forced out in October and replaced by British Land's Stephen Hester.
The pair were heavily criticised for bringing the once-mighty Scottish institution to its knees after pressing ahead with the €71 billion (£64 billion) takeover of ABN Amro at the top of market as well as over-aggressive expansion into global markets.
It left RBS crippled, and the bank is now 70%-owned by the taxpayer after it went cap in hand to the Government for emergency funds to keep it afloat. It faces annual losses of £28 billion — the biggest in British corporate history.
When McKillop took over as chairman in April 2006, RBS shares were changing hands at more than 550p each. This year, they crashed to an all-time low of 10.3p. Today, they were up 0.7p at 21.1p.
Treasury Select Committee deputy chairman Michael Fallon said: “He is right to step down immediately. It is a new bank and it should be under new management and new direction.”
McKillop and Goodwin face a grilling from the committee next week, along with Andy Hornby and Lord Stevenson, the former chief executive and chairman of rival basket case HBOS.
McKillop, a former chief executive of AstraZeneca, is likely to come under fire for failing to check Goodwin's soaring ambition and for not forcing him out earlier.
McKillop agreed to stand down early so that Hampton and Hester can complete the shake-up of the RBS board now it is almost fully nationalised.
The bank's collapse also cost the jobs of Johnny Cameron, head of corporate markets, and Lawrence Fish, head of RBS America. Mark Fisher, currently overseeing the integration with ABN Amro, will leave later this year.
Two new non-executive directors — seasoned bankers John McFarlane and Arthur — have already been appointed, and another three are due to be selected in the coming months.
McKillop said: “I believe it is appropriate to bring this forward so that Sir Philip can complete the restructuring of the board and work with the board and executive teams on the strategy going forward. I wish Sir Philip and the board every success in this difficult financial and economic environment as they strive to restore the bank's prosperity.”
Reader views (5)
Never trust a man with a moustache - that's what I learnt as a youngster!!
- Mortgage Broker N3, London, England, 04/02/2009 13:08
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The dynamic duo should have been ousted long before.Shame on them and other Board Members responsible for the RBS debacle.
- Gwynn Griffiths, Mexico City,Mexico, 03/02/2009 23:32
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They became hoteliers and business owners. Greed became need and they ran out of seed.
- Martin Clarke, london, 03/02/2009 18:05
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I was a shareholder. I backed the cardsharps. I don't regret that. But what do you expect when the Saloon burns down? Hindsight is a lovesome thing...
- Steve, London, 03/02/2009 17:04
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Hope they will repay the bonuses.
- Fred, London, 03/02/2009 16:19
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