29 May 2009
Bank of England – Court Appointments
Her Majesty The Queen has been pleased to approve, under the Bank of England Act 1998 as amended by the Banking Act 2009, the appointment of the following as directors of the Bank of England, starting on 1 June 2009.
Susan Rice C.B.E.
These appointments are being made following an open competition to identify new non-executive directors of Court, and have been made in accordance with the Commissioner for Public Appointments Code of Practice. They join the Governor and the Deputy Governors, together with Sir David Lees, who was appointed chair designate of the Court on 17 April 2009.
Brendan Barber, Roger Carr, Susan Rice C.B.E. and Harrison Young have been appointed for a 2-year term. António Horta-Osório, Mark Tucker and Lord Turner have been appointed for a 3-year term. The appointment for different initial terms is to stagger end dates and help ensure continuity on the Court going forward.
The Banking Act 2009 introduced a number of important reforms to the governance of the Bank of England. These included: giving the Bank of England a statutory objective to contribute to protecting and enhancing the stability of the financial systems of the United Kingdom; changing the governance structure of the Bank of England to support these new responsibilities, including the creation of a new Financial Stability Committee; and modernising the operations of Court, reducing its maximum size from 19 down to 12 members, of whom a majority must be non-executive. These reforms are to be implemented on 1 June 2009.
Sir David Lees, the new Chair of Court, will confirm the membership of the new Court committees shortly, including the directors who will be appointed to the Financial Stability Committee.
The transition to a smaller Court is being facilitated by all current non-executive directors vacating their posts immediately prior to the start of the new appointments (without prejudice to re-appointment). The current non-executive directors of Court that will be stepping down are:
Brendan Barber, Roger Carr, Susan Rice C.B.E. and Lord Turner (whose appointment is ex officio) are being been appointed to the new Court.
In announcing the new non-executive directors of Court, the Chancellor of the Exchequer, Alistair Darling said:
“I am delighted to announce the appointment of the new non-executive directors of the Bank of England. They will work with the Governors and Sir David Lees to implement the reforms to the Bank of England and ensure that it continues to fulfil its existing responsibilities effectively.
“The current Court of the Bank of England, chaired by Sir John Parker, has had to steer the Bank through unprecedented financial conditions. I am very grateful to the non-executive members stepping down from Court, who have fulfilled their responsibilities with commendable dedication despite the challenges faced.”
The Chair-designate of the Court of the Bank of England, Sir David Lees, said:
“I very much look forward to joining my new colleagues on the Court of the Bank and working with them and the Governors towards the achievement of the Bank’s strategic objectives.”
Notes for editors
1. The Bank of England is the central bank of the United Kingdom. Its core purposes are to ensure monetary stability and to contribute to financial stability. The Bank of England is governed by a Board known as the Court. The role of the Court is to manage the Bank’s affairs, other than the formulation of monetary policy, which is the responsibility of the Monetary Policy Committee. Court’s responsibilities include determining the Bank of England’s objectives and strategy, ensuring the effective discharge of the Bank’s functions and the most efficient use of its resources.
2. The appointment of non-executive directors to the Court of the Bank of England are made by Her Majesty the Queen on the advice of the Prime Minister and the Chancellor of the Exchequer. Appointment as a non-executive director of Court is normally for three years but on this occasion some are initially for a different duration so as to stagger end dates and help ensure continuity.
3. These appointments have been made in accordance with the Commissioner for Public Appointments Code of Practice. All appointments are made on merit and political activity plays no part in the selection process. However, in accordance with the original Nolan recommendations, there is a requirement for appointees’ political activity (if any declared) to be made public. All appointees have confirmed that they have not engaged in any political activity in the last five years. The only non-executive director of Court to hold another ministerial public appointment is Lord Turner, who is Chair of the FSA and Chair of the Committee on Climate Change.
4. Under the Bank of England Act 1998, a person is disqualified from being a non executive director if he or she is (a) Minister of the Crown; (b) serving in a Government department in employment of which remuneration is payable out of money provided by Parliament; and (c) a servant of the Bank of England.
5. The non-executive directors are to receive remuneration of £15,000 a year. Non-executive directors that also chair a sub-committee of Court will receive remuneration of £20,000 a year. The Chair of Court receives a remuneration of £30,000. In addition, all non-executive directors receive payments to cover expenses. The average time commitment required of a non-executive director of Court is estimated to be 2-3 days per month (5 days for the Chair) but this may vary.
6. The appointment of the Chair of the Financial Services Authority, currently Lord Turner, to the Court of the Bank of England, is ex officio and mirrors the appointment of the Deputy Governor for Financial Stability to the Board of the FSA. Neither the Chair of the FSA or the Deputy Governor receives additional remuneration for these cross-directorships.
7. The Banking Act 2009 introduced a number of reformsto the Bank of England, including:
- Giving the Bank of England a statutory objective to contribute to protecting and enhancing the stability of the financial systems of the United Kingdom;
- Changing the governance structure of the Bank of England to support these new responsibilities, including the creation of a new Financial Stability Committee; and
- Modernising the operations of Court, including by reducing its maximum size from 19 down to 12 members (of whom a majority must be non-executive), formalising the current arrangements whereby a non-executive director chairs the Court of the Bank of Englandand to change the minimum number of meetings of Court (to 7 in each calendar year).
8. The Banking Act 2009 provides the option of appointing one or more members of the Court as deputies to the Chair but none have been appointed at this time.
9. The Banking Act 2009 amends the Bank of England Act 1998 to introduce a new Financial Stability Committee, as a sub-committee of Court. The membership of the committee includes the Governor of the Bank, who shall chair the Committee, the Deputy Governors of the Bank, and 4 directors of the Bank, who are appointed by the Chair of Court.
10. The functions of the new Financial Stability Committee are defined in the Bank of England Act 1998, as amended by the Banking Act 2009. They are:
- To make recommendations to the court of directors, which they shall consider, about the nature and implementation of the Bank’s strategy in relation to the Financial Stability Objective,
- To give advice about whether and how the Bank should act in respect of an institution, where the issue appears to the Committee to be relevant to the Financial Stability Objective,
- In particular, to give advice about whether and how the Bank should use stabilisation powers under Part 1 of the Banking Act 2009 in particular cases,
- To monitor the Bank’s use of the stabilisation powers,
- To monitor the Bank’s exercise of its functions under Part 5 of the Banking Act 2009 (inter-bank payment systems), and
- Any other functions delegated to the Committee by the court of directors for the purpose of pursuing the Financial Stability Objective.
11. Brendan Paul Barber is General Secretary of the Trade Union Congress (2003-) and a non-executive director of the Court of the Bank of England (2003-). He has held various roles within the TUC since he joined in 1975.
12. Roger Martyn Carr is chair of Centrica plc (2004-) and Cadbury Schweppes plc (2008-). He has also been a non-executive director of the Court of the Bank of England since 2007. He has been a non-executive director of Centrica since 2004. He was also the senior non-executive director (2000-2003) and deputy chair (2003-2008) of Cadbury Schweppes. He has also previously held a number of non-executive and executive roles with Mitchells and Butlers plc, Six Continents plc, Chubb plc, Thames Water plc and Williams plc.
13. António Horta-Osório is Chief Executive of Abbey National plc (2006-), and prior to this was a Non-Executive Director (2004-2006). He is also Executive Vice President and member of the Management Committee of Grupo Santander (2000-). He is the Non-Executive Chairman of Banco Santander Totta in Portugal (2006-) where he was Chief Executive Officer (CEO) until 2006. He was previously Chief Executive and then Chair of Banco Santander Brasil (1996-2000). In 1993, he joined Grupo Santander as CEO of Banco Santander de Negocios Portugal, having previously worked for Goldman Sachs.
14. Susan Ilene Rice C.B.E. is chairman and chief executive of Lloyds TSB Scotland plc (since 2008 and 2000 respectively) and managing director of Lloyds Banking Group Scotland (2009-). She is a member of the Court of the Bank of England (2007-). She is also senior independent director at Scottish and Southern Energy (2003-), director of Scotland's Futures' Forum, the Treasury's Financial Inclusion Taskforce and Scottish Business in the Community among other roles. Previously she has held a variety of executiveroles with Bank of Scotland and NatWest, Bancorp, and a range of non-executive roles.
15. Mark Edward Tucker is currently group chief executive of Prudential plc (2005-) but has announced he will step down in September 2009. Previous to this he was group finance director of HBOS (2004-2005), and before that held a number of positions within the Prudential group, including chief executive of Prudential Corporation Asia Limited (1993-2003). He first joined Prudential in 1985.
16. Lord Turner of Ecchinswell is the chair of the Financial Services Authority (2008-) and is an ex officio appointment to the Court of the Bank of England. He is also chair of the Climate Change Committee (2008) and chair of the Overseas Development Institute. He is a Visiting Professor at the London School of Economics and at Cass Business School, City University. He became a cross-bench member of the House of Lords in 2005. He has previously been chair of the Pensions Commission (2003-2006), a non-executive Director at Standard Chartered Bank, vice-chair of Merrill Lynch Europe, and director general of the Confederation of British Industry (1995-1999).
17. Harrison Hurst Young is a non-executive director of the Commonwealth Bank of Australia (2007-), where he is chair of the risk committee and a member of the audit committee. Harrison Young has been chair of Morgan Stanley Australia (2003-2007) and vice chair of Morgan Stanley Asia (1998-2003). Prior to this he spent two years as chief executive of China International Capital Corporation, and was a senior officer of the Federal Deposit Insurance Corporation (1991-1994).
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