The idea of former Royal Bank of Scotland chairman Sir Tom McKillop
seeking re-election as a director of BP reminds me of the joke about the drunken magistrates.
BP’s chairman just happens to have been one of McKillop’s cronies on the bank board.

You don’t have to be vindictive to wonder if he is suitable to help run an oil company when he was in charge of the Edinburgh bank during its self-inflicted pain and its death throes, not least because the man who agreed the generous pension for his chief executive Sir Fred Goodwin chairs BP’s (LON:BP) remuneration committee.

No-one suggests everyone who worked for RBS (LON:RBS) or HBoS should be exiled from corporate life, never to work again. But an indication from the directors that they might have erred and a signal from the BP board that they may no longer be the brightest baubles on the Christmas tree would suggest a retreat from public company life.

Frankly, an indication from BP’s shareholders that McKillop is not wanted would help but investors are being unusually pusillanimous on retaining him.

Rather than being shunned, former directors of failed banks continue to populate other British boardrooms.

Former HBoS chief executive Sir James Crosby quit as deputy chairman of the Financial Services Authority but remains senior independent director at ITV and Compass, the FTSE 100 catering group, and will shortly become chairman of the Misys software company. Andy Hornby, his HBoS successor, is a non-executive director at Home Retail, the Homebase and Argos chains. The bank’s former finance director now chairs BT’s audit committee and has just been appointed to the Inland Revenue board.

Bradford & Bingley’s ex-chairman, Rod Kent, chairs the trustees of BT’s £40bn pension fund besides chairing the Duke of Westminster’s £13bn property estate that includes Belgravia and Mayfair. Former Northern Rock directors run 3i, chair Morrisons and are deputy chairman at ITV.

Down-table non-execs from all the failed banks continue to hold senior positions in big companies. But if that looks like the usual incestuous practice of choosing boards by plucking directors from other companies, the McKillop case is doubly doubtful.

BP’s chairman, until the long search for a successor is successful, is Peter Sutherland, the former Irish EU Commissioner. Yet Sutherland until the 2009 clear out sat on the RBS board as a non-exec.

So Sutherland was McKillop’s chairman at the oil company and McKillop was Sutherland’s chairman at the bank. Cosy? Sutherland ought to be worried that snide commentators think he wants to keep his old bank colleague on side.

And the joke? Well two magistrates arrive in court and admit they’ve been charged with drunk driving. One suggests they try each other so he climbs into the dock while his friend sits on the bench and gives him an unconditional discharge. Then they swap roles but this time the magistrate on the bench finds his colleague guilty and bans him for six months.

“That’s not fair,” squeals the sentenced man. “I let you off.”
But his colleague replies: “Yes but there’s far too much of this about. This is the second drink-driving case to come before this court this morning and it’s my duty to make an example of you.”

Now that it’s Sutherland who’s being chairman it’s time to punish McKillop.

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