Standard Life has not covered itself in glory by losing the services of Trevor Matthews, who last night announced he was resigning to take over as chief executive of Friends Provident.
Matthews is a down-to-earth and charismatic Australian who came as a breath of fresh air to the then somewhat stuffy Edinburgh institution.
He played a critical role in re-energising the still mutual insurer’s business after his arrival in July 2004, taking some tough choices and entering more profitable streams of business, thereby playing a critical role in its successful IPO two years later. He talks more intelligently about so-called “wraps” and “platforms” than anyone else I know.
The Standard Life board led by Gerry Grimstone could surely have done more to persuade the highly capable Matthews that it would be worth his while hanging on. Even if this fell short of a cast-iron guarantee that he would succeed Sandy Crombie when the latter retires in 2009, it might have reduced his enthusiasm for taking the Friends Provident shilling.
But for whatever reason — and it may have something to do with Matthews’s reported lack of enthusiasm for the botched Resolution bid last year — Grimstone et al felt unable to do this.
It is also possible that, having been offered the Friends Provident role, Matthews gave the Standard Life board an ultimatum – “either confirm that I’ll take over from Sandy by such and such, or else I’m going to have to accept Friends’ offer”. Now, it looks like Standard is going to hold Matthews to a six month non-compete clause in his contract — so a long period of gardening leave beckons.
Standard Life’s ambitious finance director David Nish must be privately delighted by Matthews’s departure, as this could be seen as having cleared a path to the succession. But Nish, a former Scottish Power finance chief, knows far less about the insurance and long-term savings markets than Matthews. And, in my view, he may not inspire quite the same loyalty as Matthews did.
I know Matthews likes a challenge — he told me as much when I interviewed him for the Sunday Herald in July 2005. Indeed, if he didn’t like a challenge, the plain-speaking antipodean would not have joined Standard Life in the first place.
When Matthews finally commences his new role at Friends Provident (probably in July) he’s going to be confronted by even more of a mess and an even tougher challenge than when he started at Standard Life three and a half years ago.
Somehow, he is going to have to convince the market that, unlike the likes of ScottishPower, BAA and Scottish & Newcastle, the former Quaker institution deserves to survive as an independent plc. Or else, like that other Aussie manager Philip Bowman, he might just sell it for top dollar and then retire loaded to his native Australia.
Is Matthews’s acceptance of the Friends Provident job an indication of how unhappy he had latterly become at Standard Life? I suspect not. However if Grimstone and his boardroom colleagues had done more to persuade him he was wanted in Lothian Road, I suspect he wouldn’t be jumping ship now.
To read an in depth interview I did with Trevor Matthews one year after he joined Standard Life, please click below:
RISING FROM THE ASHES?: AN INTERVIEW WITH STANDARD LIFE’S TREVOR MATTHEWS
This blog was published on 30 January 2008