Pru wants ex-FSA chief on board

1st Oct 2010 16:45

Sir Howard Davies, the former head of the Financial Services Authority (FSA), is in talks with Prudential about joining the insurer's board.The move is seen by many as an attempt to toughen the management team and appease shareholders following the messy non-acquisition of AIA earlier this year.Davies - the director of the London School of Economics and Political Science - is a veteran in financial services, with a background that takes in Morgan Stanley and the UK's City watchdog. If approved by the FSA, Davies would likely be appointed an independent director.Prudential, which was last week rumoured to be lining up Paul Manduca as its senior independent director, seems determined to carry out a momentous shake-up of the boardroom.Manduca, former chief of a Deutsche Bank division, has yet to be confirmed to replace 72-year-old James Ross, but looks like a leading candidate.What is unclear is whether the appointment of two such high-calibre experts will make investors once again confident in Prudential's dealings. Strong investor criticism was directed at the group's chairman and chief executive, Harvey McGrath and Tidjane Thiam, respectively. The group, Britain's largest insurer, was in the limelight in June as it failed to buy AIG's Asian division, AIA, for an eye-watering $35.5bn. After Prudential asked for a $5bn drop in the price, the bid failed leaving investors relieved but disconcerted at the idea of calming their ambitious boardroom.Since then, the company has faced much condemnation and pressure to re-jig its board, so the latest rumours will be welcomed by shareholders expecting news of heirs to the throne.