Wednesday, 27 October 2010

The Men At The Top: John Varley

The reason for this is that I was asked to write on the “men at the top” of the UK’s banks, given the changes that have been announced at Barclays, HSBC and Lloyds Banking Group.

My first task was to decide whom to write about – and which would be the UK’s “top” banks. A re-hash of CVs would be interesting, but what else could I add? The answer for me was to look at them as a whole to see where the commonalities and differences might lie.

In the end, I chose four banks: Barclays, HSBC, Lloyds Banking Group and RBS. These dominate the UK financial landscape for a number of reasons. What’s more, by the end of 2011, all will have changed their men at the top from those who saw the beginnings of the crisis. Yes, there are others (e.g. the newly-started Metro Bank and Virgin Bank), but none cast quite the shadow that the “gang of four” (to coin a phrase) do. These will be the subject of review later. I have also chosen not to include Santander as this group is officially headquartered in Spain, despite its vast interests in the UK.

Over the next weeks I’ll be looking at each of the men at the top (and, in some cases, their replacements). I’ll only be using information that’s in the public domain, so there’ll be no “secret interviews”. We start with John Varley at Barclays.

John Varley was born in 1956; his father was a solicitor. He was educated at Downside School, Oriel College, Oxford (where he took first-class honours) and then London’s College of Law. He started professional life as a solicitor in 1979, so there seems to have been a different plan for his career at the start. Things changed when in 1981, he married Carolyn Thorn Pease, daughter of Sir Richard Thorn Pease. This family established the Stockton and Darlington Railway and their bank became part of Barclays in 1902.

The next year, John Varley joined Barclays in the Corporate Finance Department of the then Barclays Merchant Bank. Senior appointments followed with the successor bank, BZW (now Barclays Capital), included Deputy Chief Executive of BZW's Equity Division and head of BZW's offices in South East Asia. In 1995 he became Chairman of the Asset Management Division and from April 1998 to October 2000 was Chief Executive, Retail Financial Services. He joined the main Barclays board on 5 June 1998 1998 and was Group Finance Director from 2000 until the end of 2003.

On 1 January 2004, he became Group Deputy Chief Executive of Barclays and was made Group Chief Executive in September 2004. Since then, he has tried to buy ABN AMRO (and must be thanking his lucky stars that the RBS consortium pipped him at the post), has seen the UK reel from the worst financial crisis it has ever known and presided over well-publicised sales of shares to Asian and Middle East buyers (one of whom lost a reported £800million on its investment). He also closed the Barclays final salary pension scheme in 2009 to save about £150millon a year and to remove the potential for an actuarial deficit of £2.2billion growing into an even larger one. Barclays has not required government assistance, along with HSBC and retains its independence.

Varley is clearly an extremely bright, able and tough individual who has made it to the top of one of the UK’s most respected financial institutions. His educational background suggests “traditional” as do his stated hobbies of walking and fishing. However, this impression is belied by his willingness to pursue adopt out-of-the-box (if not controversial) courses of action should the need arise.

His compensation for 2009 was reported to be approximately £1million. Justified, considering the shape in which he leaves Barclays, and in line with his peers.

Varley is to be succeeded in March 2011 by Bob Diamond - currently President of Barclays PLC and Chief Executive of Corporate & Investment Banking and Wealth Management – who will be the subject of another article. Varley appreciates Diamond’s contribution to Barclays’ success and is quick to point this out when needed.

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Monday, 18 October 2010


A recent experience for myself and a friend who runs his business from home made me realise how much we take the internet for granted. We both lost internet connection; me for one week, him for a good month whilst the cable to his home was renewed.

It got me thinking about how I use the internet. Here are some examples:

Sending documents
Booking hotels, flights, transport, cinema tickets, theatre tickets
Organising meetings
Website maintenance
Receiving orders*
Placing orders*
Keeping up with legislation
VOIP (Skype)
Tax returns
Road tax renewal

*could be covered by email/website

This is just a small sample. The key is, how long could your business survive without the internet? Large companies have IT experts who make sure that this is unlikely to happen, but small businesses who may not be able to afford a full time IT specialist have a potential problem.

How do you receive your internet service? Direct by cable to a PC, cable to wireless router (like me), or do you use a USB “dongle” for mobile services wherever you go? Three offer a wireless modem that connects to the Three network and allows one to run up to five wireless devices. Many of us now have mobile phones which allow us to browse the internet and send/receive emails. If we’re lucky, we can even read attachments in Microsoft Word or EXCEL, but I wouldn’t recommend this on a small screen.

What are your alternatives/fallbacks? As I mentioned above, you may have a mobile phone which allows you internet access or you may have a”dongle” supplied by one of the mobile phone providers. Coffee shops often provide free wireless access to their customers, as do some libraries. You could also use an internet café nearby, but this may not let you access any security-protected databases. Still, it’s worth having “up your sleeve”.

How about a friend/fellow business owner who has wireless internet at his/her place of work? It would need to be their own office where they can allow you access to the premises.

Otherwise, try local WiFi “hotspots” – best to search online where these are. Try using sites like and keep a list of where the nearest hotspots to you are. Check also whether they are free or if you have to pay, and who the provider is. For those who have BT as their ISP, you get access to BT Openzone free depending on your contract. It helps if you check hotspots out before you need them in an emergency. Some of the spots may not be as “hot” as you would like. As they’re often in pubs, coffee shops and other places where food/drinks are sold, you may need to pay for refreshments whilst you operate and you will need to think about confidentiality as you’ll be using an unsecured network. Another thing to think about is how easy they are to get to, how much parking will cost and how long you can “reasonably” stay there.

The other problem I’ve encountered with other WiFi networks is that, whilst I can receive emails, I can’t always send them. Best to check this as well about your “fallback” areas.

Some questions to ask yourself which might help you in deciding how to handle a failure of your ISP/service are:

1. What do I use the internet for? (list each task as you work over the next week)

2. How vital is the internet to each task? (rate Low/Medium/High)

3. How long can I do without internet for each task? (some of them may only require occasional use. The “regular” tasks need internet restored more quickly).

4. Where’s the nearest alternative source? (e.g. do you have a kind next door neighbour?)

5. What alternative sources are there?

6. How do I get there?

7. How long will it take?

8. How long can I stay there?

9. How much will it cost?

10. How much can I do on my mobile phone (this is where it pays to have a good-size screen)?

11. What’s my supplier’s troubleshooting process? (is there a dedicated helpline if the internet is down)?

12. Does my supplier provide a guaranteed timeframe for troubleshooting?

13. Do I have details of my internet account (number, password, etc) in case I need to call the ISP?

14. If problems are due to equipment failure, how soon will they call and replace it?

If you run your business from an urban area, chances are you’ll get served more quickly. If you’re in a more “remote” area as I am, things may take longer. In the meantime, what can you do to maintain a service to your customers?

Failure of internet service is very rare, but it does happen, and it’s better to be prepared than to be caught “on the hop” with the attendant reputational damage that you could suffer.

Another thought: if you use other companies’ websites to order supplies/services, what are their plans to maintain a robust service?

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