Lloyds Sweeps the Board Clean

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The acquisition by Lloyds Banking Group (NYS: LYG) of HBOS and its toxic assets was the action that effectively broke the bank, and to many, spoke of incompetence in the board room.

And I don't know about you, but if I made a blooper that big, I wouldn't expect to keep my job for long. But the financial director of Lloyds at the time, Tim Tookey, a key orchestrator of the deal, managed to hang on to his position.

When Antonio Horta-Osorio took over the chief executive post in March from Eric Daniels, a complete clear out of the "old guard" was what many shareholders wanted. But that was not what they got, and although a number of senior heads rolled, Tookey was retained, apparently to maintain some minimal level of continuity throughout the readjustment.

Shareholder pressure
While not personally blaming Tookey, who appears to be generally pretty well-liked, for the HBOS affair, prominent shareholders have been increasingly pressuring the company to dispense with his services. They have been insisting, probably rightly, that a clean start with a completely new board was what was needed.

And this week they finally got what they wanted, as the finance director has resigned to take up the post of chief financial officer at Friends Life, the new life assurance arm of Resolution.

The resignation, which follows on from those of retail banking head Helen Weir and insurance boss Archie Kane, was not a result of any falling out with the new boss, we were assured.

New recruit
Tookey will remain in his post until February, and a search for a replacement will be launched -- although few expect the search to be too arduous, with the favorite for the job, Antonio Lorenzo, having already followed his ex-boss Horta-Osorio from Santander to Lloyds.

It's hard to say who, personally, should shoulder the most blame for the HBOS fiasco, or to ascertain exactly how much influence Tookey had over Eric Daniels and his decision-making. But in symbolic terms at least, this surely has to be a good move for the bank.

Do you agree? If you're a shareholder, do you feel better having seen a line drawn under the old regime?

Please do share your thoughts, below.

More from Alan Oscroft:

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