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McKillop’s move spares BP his blushes over RBS

Financial Times

By Andrew Hill

Published: April 2 2009 03:00 | Last updated: April 2 2009 03:00

Sir Tom McKillop, ex-chairman of Royal Bank of Scotland, won’t receive much gratitude for doing the honourable thing and retiring as a non-executive at BP.

His decision could set a precedent for other ex-directors present as RBS came close to collapse, such as Bob Scott, still chairman of Yell, or Janis Kong and Sir Steve Robson, non-executives at, respectively, Kingfisher and Xstrata. BP’s board can’t be too happy, either. That’s not just because Sir Tom was, in chairman Peter Sutherland’s words, an “outstanding director”, but because his departure is a reminder that Mr Sutherland (also a former RBS director) and his deputy Sir Ian Prosser are both overdue for replacement.

But unlike his former fellow directors at RBS, Sir Tom faced specific obstacles to continuing at BP. As ex-chairman at the bank, he rightly shoulders a larger part of the blame than the rest of the board for not keeping Sir Fred Goodwin on a tight leash. He is still embroiled in an awkward spat with Lord Myners, the City minister, over Sir Fred’s politically embarrassing pension entitlement. That has kept him in the limelight for the wrong reasons. Finally, the fact he and Mr Sutherland sat together on the RBS and BP boards is the kind of corporate cosiness that gives boardrooms a bad name.

Sir Tom could have tried to stick it out. As ex-chief executive of AstraZeneca, he has experience other multinational industrial companies value. He backed Sir Fred when he bought ABN Amro, and suffered the consequences. That must make him the world’s most battle-hardened director. He would have been the ideal devil’s advocate if Tony Hayward, BP’s chief executive, had suddenly wanted to bid for an international company with roots in the Netherlands – Royal Dutch Shell, say.

But still, he is right to go. To stay would have been to presume that non-executives’ work at different companies should be judged in isolation. That makes no sense, particularly as their customers – institutional investors – are often the same. You may choose a plasterer because you like him. You may not even know that he botched a job at the house down the road. But when evidence of defective work elsewhere comes to light, you have to ask if he is the right man to complete the task.

LCR: [email protected] [email protected] To comment, visit www.ft.com/lombard

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