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Chancellor u-turns on board representation

The Chancellor has u-turned on his policy of not requiring Government representation on banks’ boards and is to make five independent appointments to the banks receiving Government investment.

The Chancellor Alistair Darling revealed yesterday that the Government would be appointing two independent members to the board of the merged HBOS and Lloyds TSB entity and a further three independent board members to Royal Bank of Scotland.

Although the appointments will not be Government officials he told Parliament last week that he did not think it would be useful to have Government representation on banks’ boards.

Speaking in Parliament yesterday, Conservative Shadow Chancellor George Osborne highlighted the Chancellor Alistair Darling’s u-turn on having board representation.

He said: “The Chancellor has also rethought his position on taking seats on the boards of the banks which we now part own.

“Last week he told the House that ‘in relation to Government nominees sitting in boardrooms, I never thought that a particularly useful course of action
to follow.’”

There will be several high profile departures from both RBS and HBOS following the Government’s bail-out package.

RBS chief executive Fred Goodwin is to be replaced by British Land chief executive Stephen Hester and RBS chairman Tom McKillop is to retire.

HBOS chief executive Andy Hornby and chairman Lord Dennis Stevenson are to stand down when the merger with Lloyds TSB completes and neither are to receive a golden goodbye package.


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