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104/09

11 November 2009

Bank of England - Director of the Court

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 John Morrison Stewart as a new Director of the Court of the Bank of England. This appointment is for a period of three years, starting on 1st December 2009.

This appointment is being made following an open competition to identify a new non-executive Director of Court, and has been made in accordance with the Commissioner for Public Appointments Code of Practice. John Stewart joins seven existing Directors of Court, the Governor and the Deputy Governors, together with the Chairman of Court, Sir David Lees.

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 were implemented on 1 June 2009.

Sir David Lees, Chairman of Court, has confirmed that John Stewart will be appointed to the Financial Stability Committee.

In announcing the new Director of Court, the Chancellor of the Exchequer, Alistair Darling said:

“I am delighted to announce the appointment of John Stewart as a non-executive director of the Bank of England. John will bring the benefits of his many years of experience in the banking sector to Court. He will work with the Directors, Governors and Sir David Lees to implement the reforms to the governance of the Bank of England and ensure that it continues to fulfil its existing responsibilities effectively.”

The Chairman of the Court of the Bank of England, Sir David Lees, said:

“I very much look forward to John Stewart joining the Court of the Bank and the Financial Stability Committee, and working with the other members of Court 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.

3. This appointment has been made in accordance with the Commissioner for Public Appointments Code of Practice. The appointment is 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. John Stewart has confirmed that he has not engaged in any political activity in the last five years and holds no other ministerial public appointments.

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. Non-executive directors receive remuneration of £15,000 a year. Non-executive directors that also chair a sub-committee of Court receive remuneration of £20,000 a year. The Chair of Court receives remuneration of £30,000 a year. 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 but this may vary.

6. The Banking Act 2009 introduced a number of reforms to the Bank of England, including:

7. The Banking Act 2009 amended 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 chairs the Committee, the Deputy Governors of the Bank, and 4 directors of the Bank, appointed by the Chair of Court.

8. 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:

9. John Morrison Stewart served as Chief Executive Officer of National Australia Bank Limited from February 2004 to January 2009. He was Managing Director and Chief Executive Officer of National Australia Bank of Europe at National Australia Bank Limited from 2003 to 2004. Mr. Stewart previously served as Deputy Group Chief Executive of Barclays PLC from 2000 to 2003, where he headed the Barclays Group Personal Financial Services operations and the Barclays Private Client operations. He served as Group Chief Executive Officer of Woolwich PLC from 1996 to 2000.

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