Royal Bank of Scotland does not yet have a date when its new chairman, Sir Howard Davies, will join its board, after announcing he would not take up his seat as planned on Tuesday this week.
On Monday, less than 24 hours before shareholders were due to vote on Davies’s appointment to the board at the annual general meeting in Edinburgh, the bank cited his commitments to the Airports Commission for his delay in taking up the seat.
The bank, 79% owned by the taxpayer, insisted Davies would still become chairman as planned on 1 September, when he will take over from Sir Philip Hampton, who has held the position since shortly after the bank’s £45bn taxpayer rescue in 2008.
RBS did not give a date for when Davies, a former top City regulator, might join the board of the bank, which is yet to report a profit seven years after the bailout.
To take up his role at RBS, Davies is giving up his position chairman of life insurer Phoenix Group and his non-executive role at American investment bank Morgan Stanley. RBS had said he would complete his work as chairman of the UK Airports Commission before becoming chairman, although it was not clear until Monday that this would prevent him joining the board as a non-executive director as well.
Davies is now expected to deliver the commission’s report, backing either Heathrow or Gatwick expansion, next week.
Established in 2012 by David Cameron to report on if and where a new runway should be built in the south-east, the Airports Commission had been instructed to delay its politically fraught recommendation until after the general election. While officially it had only pledged to deliver a report in the summer, many expected the commission’s verdict in June.
But the report’s potential publication had to be delayed when the commission reopened its consultation into air quality, to allow public comment on additional evidence compiled on pollution around Heathrow.
Then last week, anti-Heathrow campaigners, the Teddington Action Group, launched legal action, citing a conflict of interest over Davies, “one of Heathrow’s bankers”, as future chairman of RBS.
The delay in Davies taking up his boardroom seat comes as the government prepares to sell off part of its RBS stake – even though it is worth £13bn less than was paid for it. But the chancellor, George Osborne, used his Mansion House speech earlier this month to say that the sale could begin because of profits from other parts of the 2008 rescue of the banking system.
Davies is still expected to attend the annual meeting in the bank’s headquarters in Gogarburn, near Edinburgh’s airport. In a short announcement to the stock exchange, RBS said: “It had been proposed for [Davies] to join the board as a non-executive director with effect from [Tuesday’s] annual general meeting. However, given his commitment to the UK Airports Commission, until its final report is published, Sir Howard’s appointment as a non-executive director will be subject to a short delay”.
Shareholders will also vote on pay - the bank paid out £421m in bonuses in 2014 despite making a £3.5bn loss – and also be asked to give permission to cover the cost of any documents the government needs to support any selloff the stake.
This article was written by Jill Treanor and Gwyn Topham, for theguardian.com on Monday 22nd June 2015 19.13 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010