RBS to axe 7 directors in restructure

06 February 2009 / by Rachel Mason
Part-nationalised bank, Royal Bank of Scotland (RBS) has announced it is giving seven directors the chop as part of a Board restructure.

RBS announced that it has been considering its future shape in recent months and has decided that a restructured Board with a smaller number of directors will be “better able to engage effectively in the restructuring process for the RBS Group going forward."

As of today, Bob Scott, Jim Currie, Bill Friedrich, Bud Koch, Janis Kong, Steve Robson and Peter Sutherland will no longer serve on the RBS Board.

Sir Philip Hampton will remain as chairman; the other executive directors are Stephen Hester, Guy Whittaker and Gordon Pell.

Non executives are Colin Buchan, Archie Hunter, Jon MacHale, John McFarlane and Art Ryan.

These will be joined by three other non-executive directors to be appointed with the approval of UK Financial Investments Limited (UKFI), the Government organisation set up to manage Government stakes in Britain's state-backed banks.

"With several directors completing two or more terms or otherwise wishing to retire, now is the right time to reduce the size of the Board, whilst ensuring an appropriate level of continuity in its key committees," said Sir Hampton

"Everyone at RBS is fully focused on the task in hand; restoring the company to sustainable standalone strength and repaying the support of the UK taxpayer as quickly and effectively as is practicable," he said.

The move comes as the row over bank bonus payments continues to escalate. According to reports, staff are to receive six-figure bonus payments despite the fact RBS has had to be bailed out by the UK tax payer.

The Times reports that thousands of RBS workers could receive up to £100,000 for their work last year despite a £20billion cash injection from the Government, and that banks are rushing to square bonus payouts before a possible legal clampdown, like the one put in place by Presidnet Obama in the US this week.

Thousands of staff at the bank can expect rewards of up to £100,000 for their work last year, it has been claimed – the total outlay could run to hundreds of millions of pounds – and MPs have said the move will cause public outrage.

"What I would say is please be mindful about how this looks and what public opinion will be," Trade Secretary Lord Mandelson told RBS yesterday at the launch of the bank’s new £3billion small company lending facility.

He said he understood that the bank is working in a market where it has to recruit the best people and keep them in place but suggested that figures reported for potential bonus payments could be considered 'exorbitant'.

© Fair Investment Company Ltd