Scotland’s most questionable marriage was finally dissolved this week with declarations of an amicable separation despite persistent rumours that it would all end in tears.
Standard Life Aberdeen announced that Keith Skeoch and Martin Gilbert would no longer operate as co-chief executives and that Mr Skeoch would take on the job himself, with his partner moving into the role of vice chairman.
It was presented by the pair, and new chairman Sir Douglas Flint, as “natural evolution” with Sir Douglas opening his comments in a media briefing by claiming the company had “always been clear” that the joint leadership was a temporary arrangement.
That’s not how it looked when the merger was announced in 2017, nor last year when Mr Gilbert confidently stated that the structure would remain in place for years. Former chairman Sir Gerry Grimstone was adamant that the company would benefit from its joint leadership.
Last week Mr Gilbert was putting a new spin on the story, saying the arrangement had become a “distraction”. He told us that handing the job over to Mr Skeoch was his idea and added that “once Douglas was announced as chairman I said we we must have a sensible discussion about this.”
That’s a fairly rapid deterioration. It also suggests the partnership had been under strain, perhaps unsurprisingly with investors and analysts concerned at the outflow of funds, the loss of a substantial Scottish Widows mandate and a fall-out with with Widows owner Lloyds which is now embroiled in a needless legal row despite the fund being distributed to new managers. Figures released with the change of management, revealed that a further £40 billion – equivalent to about 7% of its assets at time of the merger – had been withdrawn from the business last year.
The share price has slumped, leaving the company valued at £6.34 billion, a little over half its value when Standard Life and Aberdeen Asset Management merged less than two years ago. Shares rose nearly 3% to 252p after Wednesday’s statement but they were the second-worst-performing stock on the FTSE 100 last year. Even the return of up to £1.75bn to investors through the sale of its insurance business to Phoenix wasn’t enough to mollify the company’s growing critics and the shares fell when the “sweetener” was announced last May.
While the board inevitably talks up the progress being made in putting the two businesses together, insiders have spoken of a less than smooth transition, with a clash of culture being partly to blame for a series of departures of key members of the equities teams.
When I asked if there had been external pressure to change the leadership, Sir Douglas replied “Not at all” and insisted that the company had reached the point at which “things were moving quickly”.
Indeed, the haste by which this change has come about would suggest that external voices have not gone entirely unheard.