TREVOR Matthews sensationally quit Standard Life last night to join rival company Friends Provident as its chief executive.
Matthews' shock announcement that he was leaving his position as Standard's chief executive of UK financial services took the financial world aback. The move, announced last night after the stock markets had closed, is a new blow to Standard Life a
nd Sandy Crombie, its chief executive.
Matthews' departure came amid continued reports of tension between the two men over the appointment of a successor to Crombie, who turns 60 next year. Reports from inside the company have suggested that Matthews has been unsuccessful in an attempt to be anointed as Crombie's successor.
Despite the internal friction, the departure of Matthews – popular with both shareholders and staff – is a blow to Standard Life. The company is today due to unveil its figures for new business, which are expected to disappoint for the final quarter of last year.
It comes after a period in which the future of Standard Life, demutualised in 2006, has also been called into question in the wake of a failed attempt to acquire Resolution, a battle won by Pearl Assurance.
In a statement released last night, Matthews, who earned more than £1.25 million in the year to 2006, said: "This is an outstanding opportunity for me and I look forward to it immensely.
"Friends Provident has an enviable reputation for serving its customers well and providing intermediaries with innovative products and systems."
He added: "Whilst the current environment is challenging, I plan to put past uncertainties behind and, with the team, profitably grow and develop the business. There are many opportunities and Friends Provident is very well placed to capitalise on the se."
Sir Adrian Montague, the chairman of Friends Provident, said Matthews had chosen to join at "this critical time in the company's history ".
He added: "Trevor has an outstanding track record of success in the life sector. He has a deep understanding of the industry built on his extensive international experience and more recent work in the UK and with the right skills, enthusiasm and drive to lead this company forward.
In a brief statement, Crombie, who will temporarily take on Matthews' responsibilities, put a brave face on the setback.
He said: "Trevor Matthews, with his experience of Australia, Japan and Canada, played an important role during our transition from a mutual business to a listed plc.
"We have a strong team who will relish the opportunity to continue
growth in our UK business." Although Matthews' move will be seen as a positive move for him, he faces an uphill task at Friends.
The company is facing tough questions about its future since it abandoned key growth targets last year and is set to announce the outcome of its strategic review tomorrow. That is widely expected to include plans for the sale of parts or all of the life insurer.
Friends has been recently approached by US private equity firm JC Flowers, which said last week it was considering making an offer.
Out goes the thwarted Aussie, but behold the dark horse withinBOTH in its timing and its implication, the abrupt departure of Trevor Matthews – just ahead of new business figures today – is deeply unsettling for Standard Life.
His decision to quit may be seen as merely the result of his long-burning ambition to be crowned chief executive designate having been thwarted. But this is a challenging time for the group's sales and marketing effort and Matthews was indisputably a good salesman.
Where does this leave the succession? Well-regarded though finance director David Nish is, it would be premature to regard him as an automatic "shoo-in" for Sandy Crombie's job. The group may well decide to look outside for a successor to Crombie, who reaches 60 in just over a year.
My "dark horse" internal candidate for the top job would be Keith Skeoch. He has been hugely successful as chief executive of Standard Life Investments – the real state-within-the-state – and has built up funds under management to record levels through outstanding fund performance.
Without good fund performance, what is there at Standard Life to sell? He would make an excellent group chief executive. But does he want it?
The pressing immediate question is: who leads Standard Life now? Answer: Sandy Crombie, for the foreseeable future.
The most serious question of all is over the group's strategic direction and how it plans to expand the business. Its management credibility was shaken by the autumn's failed £4.7 billion bid for Resolution, the specialist investor in closed life funds. Standard Life was forced into a humiliating retreat after being outmanoeuvred by Hugh Osmond.
This now looks to be a bid Standard Life did well to lose, considering how shares and property values have plunged since. But it has left a big question: how does Standard Life mean to grow into a global life and pensions player?
Bill Jamieson CLASH OF CULTURES EXPOSEDSTRAIGHT-TALKING Australian Trevor Matthews and Sandy Crombie, a true "Standard Lifer", do not have a great deal in common, writes Rosemary Gallagher
Crombie joined Standard Life straight from school in 1966 as a trainee actuary. He worked his way up through the ranks to become group chief executive.
In contrast, Matthews, 55, is a gung-ho and down-to-earth Australian. He made history in 2004 when he became the first executive director appointed by Standard Life from outside the organisation in more than 30 years. As the chief executive of Standard Life Assurance, he gained the support of staff at all levels.
The pair were never close, but sources in the company say that lately relations had reached the stage where Matthews and Crombie would not even look at each other in the corridor, given their different approaches to management.
Matthews has been praised for changing the old– fashioned culture of the mutual in the run up to its flotation in 2006.
Unlike the more reserved Crombie, he excels in the limelight and is far removed from the image of the staid actuary which has dominated Edinburgh's life insurance industry.
He has lived much of life in Australia, where he worked for Legal & General and the National Australia Bank, before being head-hunted to join Manulife in Canada. From there he moved to Japan, before being head hunted to join Standard Life.
A low point for him at Standard Life occurred last year when used the term "n***** in the woodpile" to describe a minor detail in the company's proposed pension changes. He found himself accused of racism but his quick apology seemed to be accepted and he remained popular with staff.
Many in Standard Life are likely to miss his refreshing approach to shareholders and staff. That view may not be shared by Crombie.
The full article contains 1144 words and appears in The Scotsman newspaper.
