Barclays shareholders are calling for the British bank to give a full explanation as to why chief executive Mr Matt Barrett has been appointed chairman despite the fact that the move is against the recent Higgs review of corporate governance standards.
The review by Mr Derek Higgs, which comes into force next month, recommends that chief executives should not become chairmen of the same company.
"...We believe it is in the interest of Barclays and its shareholders that the company make a full and public explanation as to why it is considered appropriate to deviate from best practice on this occasion," the Association of British Insurers wrote in a letter to Barclays' chairman Sir Peter Middleton.
A spokeswoman for Barclays said it has "always been (the bank's) intention to publish an explanation, as required by the combined code (on corporate governance). Barclays will be replying to the ABI letter in good time."
The letter, written by the ABI on behalf of its Investment Committee which includes several shareholders in the bank, goes on to say that such an explanation would need to reassure shareholders that "suitable safeguards have been established to ensure accountability of the management to a strong and independent-minded board."
Analysts broadly welcomed Mr Barrett's promotion and the appointment of current finance director Mr John Varley as new chief executive, saying that this move will provide continuity in management strategy and underpin the bank's future growth, but some shareholder groups are become increasingly restless.
"In general, investors are wary of chief executives moving up to the chairmanship because they fear the incumbent may be too close to a successor appointed from within," the ABI said.
A spokesman for Legal & General Group PLC, whose investment management unit holds a 3.62 per cent stake in Barclays, said L&G chief executive Mr David Prosser "is happy with the management changes" at Barclays.
AFP