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Paul Manduca, the non-executive director who at one point led Prudential’s search for a new chairman, is to take the job himself. One imagines the City grandee drawing up a shortlist with his own name at the top of it and then interviewing himself in his bathroom mirror. The former fund manager therefore faces an extended probation with shareholders, many of whom would have preferred an external candidate.
In fairness, Mr Manduca’s headhunting duties were transferred once he became a contender for the £600,000-a-year post. He joined the board in 2010 after the Pru had dropped plans to buy Asian insurer AIA for $35bn. He therefore bears no responsibility for the poor communications with investors that scuppered the deal.
The other point disgruntled shareholders should ponder is that while the chairmanship of the Pru is prestigious, it is also exposed. There is a vacancy because Harvey McGrath is retiring following a big minority vote against his re-election last year. The price that investors pay for ousting a director is that some potential replacements will be deterred by the risk of suffering the same fate
The Financial Services Authority may meanwhile bear some blame for the internal hire. Sir Nigel Rudd chairman of Invensys, the FTSE 100 engineer, reputedly dropped out of the selection race. Pressure from the watchdog for “relevant experience” in senior appointees is counter-productively restricting the talent pool, increasing the danger of City groupthink.
Competition for the post may thus have been thinner than outsiders imagine. However, Mr Manduca, who had a troubled stint as European head of Deutsche Asset Management in the early noughties, remains an uninspired choice. His weakness with shareholders will make it harder for him to stand up to chief executive Tidjane Thiam, rehabilitated since the AIA debacle by a 36 per cent rise in the Pru’s share price.