Should he stay or should he go — or will he already have gone by the time you read this? These are frequently asked questions about chief executives whose businesses hit troubled waters. It’s true that the higher you rise, the higher the risk if you don’t deliver, but it’s not always true that bosses should walk the plank whenever something major goes wrong: sometimes it makes more sense to stick around, take the flak and solve the problem. However, in the cases of Gavin Patterson of BT (ousted a week ago) and Paul Pester of TSB (still in post as we go to press), it would be fair to say the only way is exit.
You just have to look at BT’s share price graph, sinking steadily since late 2015, to see why investors were waiting for the steely-eyed incoming chairman Jan du Plessis to axe Patterson, whose glamorous personal PR has disguised the telecoms giant’s continuing failure to roll out superfast broadband at an adequate rate, generally please customers, meet regulatory expectations or deliver shareholder value. When Patterson announced a cull of 13,000 BT staff a month ago, many pundits suggested he should have been top of the list; du Plessis briefly tested the wind of opinion before making that happen, exactly as a good chairman should.
As for Paul Pester at TSB, his response to his bank’s systems meltdown in April now looks so inadequate in relation to the customer distress caused that, after two botched attempts to explain himself to the Treasury select committee, he would be ill-advised to cling on. I say that even though it seems to have been largely the fault of TSB’s Spanish parent, Sabadell, rather than Pester himself, that the transfer of accounts from old systems to Sabadell’s own platform was so poorly prepared, with no plan to cope with the huge volume of online fraud attempts that followed the breakdown.
Sabadell ought to be sending in its best operations manager to replace Pester. But the evidence of this episode suggests that might actually make matters worse. Perhaps they should call up Santander — the Spanish bank with the most UK experience, plus a reputation for robust systems and management in depth — and beg to borrow someone senior and competent. In the old days, the Bank of England would have quietly made that happen, without the need for select committee show trials.