Barclays - No Top Job As Diamond Suffers Rough Cut

No sooner had Barclays Bank confirmed that John Varley had won the succession battle to take over as Chief Executive from Matt Barrett when he goes at the end of next year, than bets were being taken on how long Barclays Capital boss, Bob Diamond, would stick around now that he has been passed over in his quest to lead the bank.

Although Diamond has been given increased responsibilities at the bank, he has not been promoted onto the Barclays board. Strange for a man who runs a business that brought in 26% of the pretax profit of the group in the first half of 2003. Current Chairman Peter Middleton apparently explained that it was not viable to have Diamond on the board. As he travels so much, he would seemingly be difficult to get back for board meetings. Yeah, right. Never heard of video-conferencing, Peter ?

No disrespect to Varley, but this decision will leave many Barcap staff feeling a little vulnerable. The fact that Varley has won out will be seen as a victory for the traditionalists - the very people at Barclays who presided over the breaking up of BZW. What will happen to BarCap now ? The boss still isn't on the main board - what kind of message is that sending out about how important the business is to the group ?

And, remember, Diamond has done well there. He has earned his spurs and enhanced his reputation. Plenty of new challenges and big pay-days await him on Wall Street if he so wishes. And if he goes, he is bound to take his key lieutenants with him. What will Barclays make of what's left then ?

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