Split roles introduced

Standard Life Aberdeen abandons co-CEO structure

Standard Life Aberdeen, Martin Gilbert and Keith Skeoch

Parting: Martin Gilbert and Keith Skeoch will no longer share the top job (pic: Terry Murden)


Standard Life Aberdeen has dissolved its co-chief executive management structure with Keith Skeoch becoming sole CEO and Martin Gilbert taking on the role of vice chairman.

The Edinburgh-based asset management and wealth company has faced questions about the leadership structure which was put in place following the merger of Standard Life and Aberdeen Asset Management.

The change comes about as the company reports further outflows of funds and a dip in adjusted profit before tax on continuing operations to the end of December from £660 million to £650m. Total adjusted profits before tax fell from £1.039bn to £860m. Assets under administration fell from £608.1 billion to £551.5bn.

Today’s announcements were accompanied by an uplift in the shares. Standard Life Aberdeen led the FTSE 100 risers, up 3.5%.

In a statement issued with its results, the company said: “The management changes now being announced are designed to strengthen our client focus, simplify reporting lines and put in place a structure which will facilitate robust execution of the next stages of our transition and transformation programmes.”

The changes take effect from today. Mr Skeoch has been appointed sole chief executive “recognising the critical importance of his client facing responsibilities. 

“Martin Gilbert becomes vice chairman of Standard Life Aberdeen, Chairman of Aberdeen Standard Investments and will continue to be an executive director of the board. 

“In this role, Martin will be able to focus solely on our strategic relationships with key clients, winning new business and realising the potential from our global network and product capabilities.”

It is thought the changes were favoured by new chairman Sir Douglas Flint who succeeded Sir Gerry Grimstone at the start of the year. He told a media conference call: “We have always been clear that the co-CEO would be temporary.”

Asked if there had been any external pressure for change, Sir Douglas said: “No, not at all. It was a natural evolution of the structure that was exactly the right thing to do.”

Mr Gilbert, also speaking on the call, said the co-CEO arrangement has “absolutely worked” but he instigated the change because it was becoming a “distraction”. He said: “I suggested Keith becomes sole CEO.”

The board also announced that after 34 years with the company, Bill Rattray will retire from the board “by mutual agreement” on 31 May.  He was appointed to the board in August 2017, having been finance director of Aberdeen Asset Management since January 1991.  He will be succeeded by Stephanie Bruce who, subject to satisfying all relevant regulatory requirements and processes, will take up the position of chief financial officer and executive director on 1 June.  Her appointment will be subject to election by shareholders at the AGM on 14 May.

Ms Bruce has more than 25 years sector knowledge of technical, reporting and commercial practices.  She has been a partner in PwC since 2002 and a member of the Assurance Executive since 2016, leading the Financial Services practice for Assurance in the UK. 

In addition, Richard Mully will retire from the board at the conclusion of the 2019 AGM.  He has been a director since August 2017, having served as a director of Aberdeen since April 2012. 

Commenting on these board changes, Sir Douglas said: “A great deal has been achieved by both Martin and Keith to drive the business forward, and leave us well-placed for the future. The changes that we have announced today have the unanimous backing of the board. The new structure will strengthen our client focus, simplify reporting lines and facilitate robust execution of the next stages of our transition and transformation programmes.

“On behalf of the Board, I would like to thank Bill and Richard for their dedicated service to Standard Life Aberdeen, particularly as it came together after our merger in August 2017.  I am delighted that Stephanie will be joining us as CFO bringing with her extensive experience gathered over an impressive career in financial services”. 

Following these changes, the board will comprise four executive directors, five non-executive directors and the chairman.  The board will be made up of four women and six men.

The company intends to maintain the dividend per share at the 2018 level during the period of transformation. The full year figure is 21.6p against 21.3p last time.

Martin Gilbert commented: “In a tough year of continued change for our industry, we saw further net outflows – equivalent to about 7% of our starting assets. Yet as we have shown by our increased gross inflows, we continue to develop a business that has the scale and breadth to compete globally – and to continue to get closer to British savers through our growing Platforms.”

Keith Skeoch commented: “We are working hard to deliver what is within our control. Our integration process is running ahead of schedule and is now roughly 75% complete even though we are less than halfway through the original timetable. We are encouraged by improvements in investment performance in key areas, and our ‘new active’ capabilities mean that we are set up well to capitalise on the trends and opportunities shaping our industry – while continuing to deliver value and returns for our shareholders.”

See also:

Comment: Natural evolution puts Standard Life Aberdeen in a spin

O’Dwyer tipped to replace Loney as Royal London CEO

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