BREAKINGVIEWS-Schroders lives on through UK boardroom alumni

Thu May 12, 2011 12:56pm BST

Quotes

   

-- The author is a Reuters Breakingviews columnist. The opinions -- The author is a Reuters Breakingviews columnist. The opinions expressed are his own --

By Robert Cole

LONDON, May 12 (Reuters Breakingviews) - Schroders is living on through its UK boardroom alumni. Richard Broadbent's appointment at Tesco (TSCO.L) means ex-employees of the investment bank now chair five FTSE 100 companies. It's 11 years since Schroders sold the business to Citigroup. But its strong links with corporate clients and institutional investors are still paying dividends.

Broadbent joins a club of former colleagues that includes Robert Swannell, chairman of Marks & Spencer (MKS.L), Alison Carnwath of Land Securities (LAND.L), Gerry Grimstone of Standard Life (SLET.L), and Win Bischoff of Lloyds Banking Group (LLOY.L). Had he not opted for Tesco, Broadbent would have been in pole position to take over as chairman of Aviva (AV.L), the insurance group.

The rise of Schroders alumni is all the more striking given the relative dearth of ex-investment bankers in similar positions. Though it's not unusual for former dealmakers to take the helm of financial institutions, relatively few have crossed over to mainstream corporations. Marcus Agius, the former Lazard man who is now chairman of Barclays (BARC.L), is one exception: he was chairman of airports operator BAA until its takeover by Ferrovial (FER.MC). John Bond has chaired both Vodafone (VOD.L) and Xstrata XTA.L since leaving HSBC (HSBA.L) -- though he was never an investment banker.

What explains the Schroders connection? One reason may be the investment bank's sale to Citigroup (C.N) in 2000. Though many of its bankers went to work for the U.S. group, most have since moved on and carved out alternative careers.

Schroders' pre-millennial model of combining investment banking with asset management is also relevant. Though the boardroom alumni are former investment bankers, familiarity with fund management is a necessity. So is financial sophistication. Lordly landowners and descendants of corporate founders -- who until 20 years ago filled many blue chip-chairs -- no long cut the mustard.

Clearly, the stock of former Schroders investment bankers is finite. But their ascent may still have some way to go: another alumnus is David Challen, who is currently a senior independent non-executive of both miner Anglo-American (AAL.L) and Smiths (SMIN.L), the engineering group. The "Schroderati" will be making their presence felt in Britain's boardrooms for some time to come.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Get Breakingviews alerts directly to your inbox three times a day. To sign up click here: here

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

CONTEXT NEWS

-- Richard Broadbent, the deputy chairman of Barclays Bank, will join the board of Tesco on July 2 and will become chairman of the company on Nov. 30, the retailer announced on May 11. Broadbent will step down from his position at Barclays.

-- Broadbent worked for Schroders between 1986 and 1999. He was appointed head of European corporate finance in 1995 and joined its executive committee in 1998.

-- Tesco statement: here

(Editing by Peter Thal Larsen and David Evans)

((robert.cole@thomsonreuters.com)) Keywords: BREAKINGVIEWS SCHRODERS/