Magazine article The Spectator

Nice Bloke, No Balls

Magazine article The Spectator

Nice Bloke, No Balls

Article excerpt

THERE was a certain logic in Gordon Brown's appointment of the former NatWest boss Derek Wanless to inquire into the future of the NHS. The bank and the health service both fell into the category of 'once great British institutions'; both faced management problems associated with internal resistance to change; both had millions of disgruntled users accusing them of failing to provide a customer-driven service.

What was odd about the appointment, however, was that Mr Wanless was available to take it only because NatWest had ceased to have a future of its own, and because he himself had ceased to work there, having been ousted in 1999 shortly before the bank fell to a humiliating takeover by the Royal Bank of Scotland. Examination of his record indicates that, far from applying brilliant strategic analysis to NatWest's problems, he was a weak chief executive who went along with a doomed strategy against his better judgment. Far from thinking outside the box, as is surely required for the NHS, he failed to challenge an outdated management mindset which during his tenure succeeded in shrinking NatWest's stature from market leader to derided also-ran. Not for nothing did City wags dub him 'Wanless Chinder' or, less witty but more direct, 'Derek Hopeless'.

These are harsh judgments: in mitigation, no one has ever suggested that the 54-year-old Mr Wanless is anything other than a pleasant, well-intentioned man with a first-class mind and an admirable family life. He is a product of a meritocratic system of which Britain and NatWest can be proud. The only child of a storeman in a Tyneside cement works, he won a scholarship to Newcastle's Royal Grammar School, which spotted his gift for mathematics. The National Westminster Bank recognised it too, and gave him a 450-ayear scholarship to King's College, Cambridge, where he took a first with ease.

He joined the bank after graduation in 1970, starting as a clerk in Darlington and rising to become area director in the northeast at 35. Meanwhile, he married Vera, a local lass he had known since she was 16; they have five children. Everything written about him mentions his passion for Newcastle United; one report adds that he was also 'once spotted playing air guitar at an Eric Clapton gig'.

This product of a 1950s childhood and high-street banking's promotion ladder was in fact conventional in every way, except for a brain that enabled him to play blindfold chess against multiple opponents. By 1986, the year NatWest overtook Barclays as Britain's most profitable bank, he had been called to London to take charge of personal banking. By 1990 he was running the whole domestic branch network - which means, incidentally, that he was responsible both for the exceptionally harsh treatment of smallbusiness borrowers in the recession, and for a memorably irritating series of television ads which tried to counter the PR damage.

Inside NatWest, everyone knew that Wanless was destined for the top; they just didn't expect him to get there so soon. But the 1987 Blue Arrow scandal in the group's investment bank, County Natwest, shortened the careers of a layer of executives above him, including the chairman, Lord Boardman, who resigned. Boardman's successor, sent in by the Bank of England, was the barrister Lord Alexander, who had little business experience but firm views. When he wanted a new chief executive in 1992 he promoted Wanless, at least three years earlier than Wanless himself might have expected.

'He came out of the blue with this reputation as a mathematical genius,' says one top banker of the era, 'but I don't think NatWest people really looked up to him as a leader. …

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