The Independent (UK): RBS board split over candidates for chairman: “…he will face competition from Sir John Kerr, a former high-flying diplomat and a director of Shell…”: “He chairs the steering committee at Shell that is overseeing a review of its board structure, after a scandal over the size of its oil reserves.” (ShellNews.net) 24 Jan 05

Katherine Griffiths in New York and Saeed Shah

Jan 24, 2005

THREE LEADING businessmen are being considered for appointment as the new chairman of the Royal Bank of Scotland, with the bank's directors apparently divided over the key appointment.

RBS has begun the process of finding a successor for Sir George Mathewson, who is expected to depart by the middle of next year. Sir Tom McKillop, the chief executive of the troubled pharmaceuticals giant AstraZeneca, has emerged as an early front-runner.

However he will face competition from Sir John Kerr, a former high-flying diplomat and a director of Shell, and Sir Peter Mason, the chief executive of Amec, a leading engineering company. All three are Scotsmen. The RBS chairmanship is a four-days-a-week job.

Sir Tom, 62, who has a doctorate from Glasgow University, is understood to have been approached about the position. Sir Tom, who was a non- executive director at Lloyds TSB for six years, is favoured by Peter Sutherland, the RBS non-executive director driving the search for a new chairman. Mr Sutherland is chairman of BP, where Sir Tom is also a director.

Insiders at RBS see Sir Tom as "Sutherland's man" and some are concerned that Mr Sutherland is looking for a candidate to take on RBS's strong- minded chief executive, Sir Fred Goodwin. One source said: "Sutherland and Goodwin lock horns at almost every board meeting."

Some highly placed people at RBS and in the City are uncomfortable about any move to appoint Sir Tom. Not only could that lead to boardroom strife, but they point out that Sir Tom has presided over a series of setbacks at AstraZeneca over potential blockbuster drugs that have disappointed.

All three candidates could face opposition in the City because many investors do not understand why the job has to go to a Scotsman. Some believe that RBS is already too parochial and needs someone who is not part of the "Scottish mafia". RBS declined to comment yesterday.

Sir John Kerr, 62, was born in Grantown-on-Spey, brought up in Glasgow and educated at Glasgow Academy. A former ambassador to the United States, he was head of the Diplomatic Service from 1997 to 2002. He chairs the steering committee at Shell that is overseeing a review of its board structure, after a scandal over the size of its oil reserves. He also sits on the boards of Rio Tinto, the leading mining business, and the Scottish American Investment Company.

Sir Peter Mason, 59, educated at Marr College in Troon and Glasgow University, has been the chief executive of Amec since 1996. He has attracted attention over the past year after the company decided to bid for contracts for reconstruction work in Iraq. He is also on the board of BAE Systems.