I do not envy the search committee tasked with finding a new CEO for RBS after Stephen Hester’s departure. The bank is an anomaly, publicly owned but supposedly run at arms’-length from government. However, when banking controversies hit, as they so often do, they hit RBS hardest as it is majority-owned by the taxpayer. I suspect that everyone approached for the job will be acutely aware that Hester has had to twice forego his bonus under political pressure.
Hester has long argued privately that selling off a tranche of RBS shares would be a good thing, sending a signal that the bank would soon be returned to private ownership and relative normalcy. He will now depart before that happens. But it does seem that RBS privatisation is planned for late 2014, just months before the next election.
The other challenge for the search committee is finding someone untainted by scandal and the financial crisis. Hester came to RBS from British Land, free of the stain of the banking crisis. It remains to be seen if they can find another ‘good banker’ with the experience and knowledge required to run a bank of RBS’s size who is prepared to take on the job.