As I See It: Terry Murden
Martin Gilbert’s departure from Standard Life Aberdeen was finally confirmed last week after a summer of speculation and denial. The veteran financier will sever ties next year, claiming in a weekend interview that he decided to go before he was pushed. It was a comment that will compound suspicions that two years after the merger of the two financial titans – Standard Life and Aberdeen Asset Management – the company still has to sort out its top management.
Gilbert, who founded Aberdeen 36 years ago, responded somewhat uncomfortably and unconvincingly to my questions earlier this year about the termination of his co-CEO role at the merged company with Keith Skeoch. He claimed that the arrangement had “absolutely worked” but that he had instigated the change because it was becoming a “distraction”.
Now, after just six months in the new role of vice chairman of Standard Life Aberdeen and chairman of Aberdeen Standard Investments, focusing on “strategic relationships”, it has been agreed that it is perhaps not so strategic after all.
New chairman Sir Douglas Flint told me in March that Gilbert’s change of role was “a natural evolution of the structure that was exactly the right thing to do”. With Gilbert now admitting he feared Sir Douglas was about to tap him on the shoulder for a second time, he said that he is looking forward to “fresh challenges”.
In the summer the company dismissed as “inaccurate” reports that he would become chairman of fintech banking business Revolut. However, it looks like a safe bet to assume Gilbert will be heading up the board at the startup some time soon.
With a key player about to depart, Sir Douglas will be focused on how the company can boost a stubbornly underperforming share price. Notwithstanding recent sharp falls across markets in the past few weeks, Standard Life Aberdeen has been among the weaker stocks.
Investor outflows and disappointing profits have seen the group’s share price almost halve – to 271p this weekend – since it was formed in autumn 2017. It means the merged company which began life as an £11billion titan is worth less than £6.5 billion.
When the merger was announced it was clear that it was a takeover by Standard Life, even though Aberdeen got some of the key posts and its more aggressive culture appears to have dominated management processes. Even the communications team saw a clear-out of most of the former Standard Life staff.
The company is now being reshaped without a number of the top Aberdeen team after Bill Rattray, finance director at Aberdeen since January 1991, retired from the board “by mutual agreement” on 31 May. Richard Mully, a director since August 2017 and a director of Aberdeen since April 2012, retired from the board at the conclusion of the 2019 AGM.
In addition, Barry O’Dwyer, who steered the wealth management business, moves across St Andrew Square to take over as new CEO at Royal London.
Strategy is now in the hands of Skeoch who has form in bringing focus to Standard Life after his elevation from Standard Life Investments into the group role. He will have no one else to blame if the upturn proves elusive.
Sir Douglas has shown he will act quickly to make the changes required. With uncertainty still a pervasive influence on the markets, next year will be a testing one for the sole CEO.