Much speculation surrounds the knighthood of Sandy Crombie, chief executive of Standard Life, in the New Year honours, writes Ian Fraser.
The sophisticates’ interpretation is that the Edinburgh life assurance giant “got its crisis in early” with its traumatic U-turn on mutuality in 2004, leaving it financially strong with a surplus of £3.4 billion and therefore unlikely to come knocking on the Treasury’s door pleading for bail-outs.
The company’s shares, which floated at 240p in 2006, fell by “only” 20% in 2008, to close the year at 202p. That is a strong performance when compared to the 90% plus destruction in value seen at HBOS and the Royal Bank of Scotland.
There is also speculation that Crombie — known to be calm in a crisis — is being rewarded because the insurer’s investments arm, Standard Life Investments, twice stepped in to help the prime minister Gordon Brown with the rescue of troubled banks.
It supported, and indeed partially underwrote, Bradford & Bingley’s doomed £400 million rights issue in July, even though this led to a massive destruction of shareholder value when the former building society was nationalised. In October, SLI rode to the rescue of Lloyds TSB’s controversial takeover of HBOS, apparently after a few asset management heads were banged together by Downing Street.
Crombie — described as “dour” or “dull” only by those who don’t appreciate his dry humour — may also be being rewarded for sheer staying power. Educated at Buckhaven High School, the soft-spoken Fifer joined Standard Life as a trainee actuary in 1966. He has worked for the same institution for a phenomenal 42 years and seems to have no intention of stepping down soon.
A more straightforward view of why Crombie, 59, got the “K” is his services to arts and culture. He is chairman of the Edinburgh Unesco City of Literature Trust and vice-chairman of the Royal Scottish Academy of Music and Drama. Under his stewardship, Standard Life has been a major supporter of avant-garde international dance events at the Edinburgh Festival, some of which have been anything but dour and dull.
This article was published in the Sunday Herald on 4 January 2009