Even for a man of Sir George Mathewson’s stature it was a significant occasion: his first annual general meeting as the chairman of the bank he built up. Surrounding him, a cohort of 18 other besuited men and one woman. So how was it for Sir George?
As he faced Royal Bank of Scotland and former NatWest shareholders, some of them discontented, at the merged bank’s first annual general meeting at Edinburgh International Conference Centre, you sensed that the enlarged Royal Bank’s chairman was having to rein in his impatience, even his occasional distaste.
Mathewson certainly had a tough act to follow in the suave Lord Younger, former Conservative Secretary of State for Scotland, whose diplomatic skills and tact were legendary. Sir George Mathewson is much more of a bruiser.
Many of the small shareholders at the meeting seemed distinctly underwhelmed by the bank’s superlative performance on the stockmarket since it acquired NatWest two years ago. For them, other aspects of its behaviour, including the alleged mistreatment of a classic motorcycle, the dismissal of a disabled employee, the way it has airbrushed directors’ start dates from its annual review, and the way it draws its Edinburgh map, was of far greater import than mere financial performance.
Many of the investors and journalists at the well-attended meeting had probably secretly been hoping for fireworks. After all, it was Mathewson who last year sought to downplay the handsome bonuses received by RBS executive directors following the NatWest takeover by claiming they wouldn’t have “given you bragging power in a Soho wine bar”.
But in the end, despite some shareholders’ efforts to rile him, George Mathewson kept his cool.
Regulars at the annual meeting, including the redoubtable Miss Mary Mackenzie, were as keen as ever to get their hands on the hallowed microphone. But even this irritated the board by malfunctioning on the day.
They certainly had no intention of giving Mathewson an easy time just because the bank’s shares had broken through the £20 barrier the previous day. The fact that RBS has outperformed the DJ Stoxx European banking sector by nearly 30% over the past year appeared not to matter jot.
Mackenzie declared that she “noted the disappearance of [Mathewson’s] former house from the report and accounts”. A note in previous annual reports has included a reference to Mathewson’s former “dwelling-house” which the bank purchased from him and his wife in May 1998 for £125,000.
Perhaps his £2.2m package has enabled him to buy it back?
Mackenzie, who tends to treat bank directors as if they were naughty schoolboys, said she was disappointed with “the opaque reasons given for the spectacular increase in directors’ pay and benefits, which appear to include loans to persons who are only connected with directors.”
Cheekily, she added: “I would be careful about using Edinburgh’s green belt for building.” This was a reference to the bank’s proposed new head office building at Gogarburn, which Sir George Mathewson had earlier trumpeted as a symbol of the bank’s commitment to Scotland.
John Cruickshank, another regular thorn in the bank’s side at annual general meetings, was more exercised by the length of tenure of certain RBS non-executive directors. Sir Iain Vallance (a non-executive for nine years) and Sir Angus Grossart (16 years) came in for particular criticism. Cruickshank said there was a danger the pair had “gone native”.
Mathewson politely suggested that long tenures were not necessarily synonymous with a lack of independence. But he did add that both Grossart and Vallance had stepped down from RBS’s remuneration committee last year.
Later, a shareholder said: “Long experience can be beneficial to a board.”
Mathewson said he “heartily agreed” claiming it meant that at least some non-executives had experience of bank governance during a slower economic cycle. All the resolutions, including eight that will permit the bank to make political donations, were voted through by nearly everyone.
Overall, it was an impressive first showing for Sir George.
This article was published in the Sunday Herald on 28 April 2002