Mark Kleinman: Aviva’s missed deadline ensures brickbats

Mark Kleinman
Follow Mark
Aviva, Britain's largest insurance compa
Aviva missed its own deadline to replace its CEO (Source: Getty)

Viva Aviva? For such a stalwart of blue-chip boardrooms, Sir Adrian Montague suddenly can’t put a foot right.

Four years after taking over the chairmanship of Aviva when John McFarlane scuttled off to Barclays, he’s ended up in a rather large pickle of his own making.

Sacking Mark Wilson as the insurer’s chief executive last October, Montague spoke of the need for new leadership; “there is much further to go in accelerating our strategic development and enhancing shareholder value,” he said.

True, but Montague shares the blame for the mistakes made in the last year which led to the removal of its Kiwi boss.

First, the fiasco over Aviva’s plan to redeem hundreds of millions of pounds of preference shares, which infuriated investors and was eventually abandoned.

Second, the nonsensical decision to allow Wilson to join the board of BlackRock, a rival to Aviva’s asset management arm.

That suggested a tone-deafness that would have infuriated Aviva Investors’ fund managers and governance executives had it been demonstrated by an investee company.

Montague’s most recent error was to set a public target of having a new chief executive in place within four months of Wilson’s ousting.

That self-imposed deadline came and went last week, meaning that Aviva directors now look, at best, incompetent, and, at worst, riven by a boardroom split.

The City rumour-mill suggests that Andy Briggs, its UK chief executive, failed to make the shortlist for the top job, which – if true – would be bizarre.

Potential external candidates including Bruce Hemphill, the former Old Mutual chief executive, Allianz’s Jackie Hunt and Paul Geddes of Direct Line Group, are all thought to have ruled themselves out.

Alison Brittain, the chief executive of Whitbread who was reported last week to be “being lined up” as Wilson’s successor, chose not to pursue the role as far as having an initial meeting, according to an Aviva insider.

That leaves Maurice Tulloch, the head of its international operations, as the stand-out candidate – but even if he gets the job, it now looks like a botched process.

Not all of the speculation, of course, is Aviva’s fault – but even the most naive media adviser would have

anticipated a surge in speculation as the magic four-month mark approached.

All in all, given his track record and the esteem in which many of his peers hold him, I’d have expected Montague to have handled the process more deftly. Instead, he might have unwittingly conspired to makethe company vulnerable to an opportunistic bid.

Going overboard at Cafe Ritazza

Man overboard at SSP Group, the airport food retailer? Not if Vagn Sorensen, its chairman, has anything to do with it.

For the second year running, Institutional Shareholder Services (ISS) is recommending that investors oppose his re-election on account of his plethora of jobs.

Last year, one-third of SSP shareholders voted against him, since when he’s surrendered his chairmanship of Scandic Hotels. He remains, though, chairman of Air Canada and FLSmidth & Co, and a board member at Royal Caribbean Cruises. That means he’s still too busy for the liking of many investors. Another big revolt against Sorensen beckons next week.

Realising its True Potential

Britain’s fintech arms race shows little sign of abating, with Oaknorth and Revolut seeking to outdo each other with the sector’s largest-ever funding rounds.

It’s not plain sailing for everyone with elevated valuation ambitions, however.

True Potential, the wealth management platform, raised eyebrows by floating a £2bn price tag when it put itself up for sale last year. Talks with a stream of private equity firms have slowed to a trickle. Sources say the company is now pursuing a refinancing, presumably with a dividend payout that should ease the pain of failing to achieve its, er, true potential through an outright sale.

Mark Kleinman is the City Editorof Sky News. @MarkKleinmanSky

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.