HBoS urged to dump Simpson

LORD Simpson, who presided over the Marconi disaster, may be ousted as a non-executive director of the HBoS banking group after pressure from leading shareholders.

Marconi was brought to its knees under his stewardship. Simpson joined Bank of Scotland, which linked with Halifax last year, as a non-executive director last year and was at one point tipped as a possible future governor, its equivalent of chairman.

It is understood that some shareholders raised concerns about Simpson's appointment at the time of the Marconi debacle. He later quit as chief executive with a £2.8m pay-off.

HBoS shareholders say they will need a lot of convincing to vote for Simpson when he comes up for re-election at the annual meeting in May. An investment manager said: 'I'm not calling for Simpson's head at this stage, but I will want the board to make a very convincing case if they want to keep him.'

Another said it would be 'quite inappropriate' for HBoS to put Simpson forward again.

Simpson and former Marconi finance director John Mayo have been blamed for pursuing a doomed strategy to turn Marconi from an engineering and defence group into a leading telecoms equipment company. They loaded the company with debt and when the bottom fell out of the telecoms market, sales crashed and thousands of employees were sacked as the firm fought to survive.

The speed of Marconi's collapse, the delay in communicating information to shareholders and the apparent inadequacy of reporting within the group raised questions about Simpson's abilities and how the boardroom was run.

HBoS denied that the issue of Simpson's place in its boardroom had been considered by executive directors. It said that all nonexecutive directors would stand for reelection at the annual meeting because the merged bank was technically a new entity, so it has to seek shareholder backing for a new board.

Simpson also sits on the board of Nestle, the world's biggest food company.