Standard Chartered forced to back its management after media succession talk

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Standard Chartered was under intense pressure on Thursday after being forced to issue a statement backing its chairman, Sir John Peace, and chief executive, Peter Sands.

In a highly unusual stock market announcement, the emerging markets-focused bank said: "The board wants to be absolutely clear that it is united in its support of both Peter Sands and Sir John Peace, and the management team, in delivering the refreshed strategy, restoring the bank to profitable growth and delivering returns for our shareholders."

Peace is the chairman of the bank – which warned last month that its profits would fall 20% this year – and has been under fire for presiding over shareholder revolts at the three companies he chairs. As well as Standard Chartered – where 41% of investors failed to back the pay of Sands and other directors – investors at Burberry rejected the pay of its new boss, Christopher Bailey, and protested against Peace's successor as chairman at credit checking company Experian.

The bank issued its backing for Peace and Sands – one of the few bank bosses to have held on to their jobs during the banking crisis – after reports the chairman was beginning plans to seek his successor after nine years at the helm.

Despite its denial that plans were afoot to replace Sands, the bank insisted that it took succession planning seriously.

"Robust and considered succession plans are in place for all of the senior leaders. We take our board succession extremely seriously and discuss this topic with our shareholders on a regular basis," the bank said.

"We will ensure orderly succession takes place at the appropriate times, and only in a responsible manner consistent with full market transparency," it added.

"We do not accept these media rumours. No succession planning is taking place as a result of recent investor pressure," it concluded.

Sands had embarked on a reshuffle of his management team last year when the finance director, Richard Meddings, said he was quitting – he left last month – and another long-standing employee, Mike Rees, was named deputy chief executive.

Investors then warned the board of complacency after the annual meeting in May where the protest took place over the long-term bonuses that could be paid out after a year.

Sandy Chen, analyst at Cenkos, said: "The board continues to back Sands and Peace – of course they would. But we can understand why there is pressure for change at the top."

Until last year the bank had been able to claim its profits had risen every year – even during the financial crisis – but its growth record has now been broken, with profits falling in 2013 and forecast to fall for this year.

The bank's largely unblemished public image was tarnished in 2012 when US regulators fined it £415m for breaching sanctions with Iran. Peace was later forced to issue a humiliating apology to the US regulators via the stock market after describing the Iranian breaches as administrative errors.

Powered by article was written by Jill Treanor, for on Thursday 24th July 2014 08.36 Europe/London © Guardian News and Media Limited 2010


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