Changes at the top

The business news that matters

Hello and welcome to the latest Off to Lunch…

BT has appointed its first female chief executive, naming Allison Kirkby as the successor to Philip Jansen.

BT only announced on July 10 that Jansen would step down as boss, so the announcement today shows how advanced the company was in making a change at the top. Kirkby will take over from Jansen “around the end of January 2024 at the latest”, according to BT’s statement, which you can find below…

Kirkby is from Scotland and will be paid a salary of £1.1 million, the same as Jansen. At present there are nine female chief executives in the FTSE 100 following the departure of Dame Alison Rose as boss of Natwest last week.

Kirkby, 56, qualified as a chartered accountant while at Guinness in 1990 before working for Proctor & Gamble for 20 years. P&G has been a training ground for a collection of UK executives, including the last two BT bosses - Jansen and Gavin Patterson. Richard Harpin, the latest guest on our Business Studies podcast, also worked at the consumer goods giant.

After leaving P&G in 2010, Kirkby worked for Virgin Media and was the finance director for Shine, the television production company founded by Elisabeth Murdoch. She then ran Scandinavian telecoms companies Tele2 and TDC.

Since 2020, Kirkby has led Telia, a Swedish-based telecoms group which is the largest across the Nordic and Baltic regions. Shares in Telia have fallen by 5 per cent on news of Kirkby’s departure, valuing the company at £6.6 billion. The Swedish government owns just under 40 per cent of Telia, so Kirkby has experience in dealing with companies with a connection to the public sector, which will be useful for BT. Kirkby was also a non-executive director at Greggs, the bakery chain, between 2013 and 2019.

In the statement from Telia announcing her departure, Kirkby said:

“After almost 10 years of living apart from my family, and the unique opportunity now offered to me in the UK, I have carefully considered and decided to leave Telia and take on a new challenge. In the meantime, I will continue in my role, driving our current agenda forward with full focus and commitment during the remainder of my tenure.”

Kirkby has been a non-executive director at BT since 2019, meaning she has worked with the board for the last four years. It has become common in the UK for companies to appoint a non-executive director as their next chief executive - Hein Schumacher and Unilever is another recent example. However, at BT’s annual meeting earlier this month, 12.4 per cent of the votes cast by investors were against Kirkby’s re-election to the board, due to concerns about the number of roles she has. Kirkby is also an independent director of the Canadian group Brookfield Asset Management, which is chaired by Mark Carney, the former governor of the Bank of England.

Shares in BT have fallen 2 per cent following the announcement today, valuing the company at just over £12 billion.

At BT the challenges for Kirkby will include rolling-out fibre broadband through the company’s Openreach division, overseeing plans to cut up to 55,000 jobs from BT’s 130,000-strong workforce by 2030 and juggling the demands of two key investors - Patrick Drahi, the French tycoon, who owns 24.5 per cent, and Deutsche Telekom, which owns 12 per cent.

Kirkby’s appointment could lead to fresh speculation that BT will spin-off Openreach, While in charge of Danish telecoms company TDC, Kirkby initiated a break-up of the group into two separate entities. One company contained Denmark’s largest mobile phone and broadband network, the other contained its cable TV brands and other consumer services. Kirkby also sold Telia’s mobile towers and other businesses.

Another prominent UK company that has announced a management change today is Capita, the outsourcing group. Jon Lewis will stand down as chief executive “towards the end of the year” after running Capita since December 2017. He will be succeeded by Adolfo Hernandez, the head of the global telecoms division of Amazon Web Services, Amazon’s big cloud-computing business. Capita statement here. Earlier this year Capita was hit by a cyber attack.

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Other stories that matter…

1. Unsecured lending to consumers in the UK rose by the most in five years in June - driven by people taking out more personal loans and car finance deals - while the number of mortgage approvals also rose unexpectedly. That is according to the latest data from the Bank of England, which you can find here. In other economic news, the eurozone economy returned to growth in the second quarter, although only just, and inflation fell to 5.3 per cent. Story here

2. Rishi Sunak, the prime minister, has announced plans to expand North Sea oil and gas drilling and set-up carbon capture and storage hubs off the coast of north-east Scotland and Humberside. The approach to the North Sea is in contrast to Labour’s pledge to stop new licences. Sunak has said that the two carbon capture and storage clusters could support up to 50,000 jobs. Story here. Meanwhile, the Financial Times has looked at whether a lack of cables could delay new energy projects and the transition to clean energy. Analysis here

3. Construction of High Speed 2 between London and Birmingham and then between Birmingham and Crewe is “unachievable” within the current schedule, budget and scope according to Infrastructure and Projects Authority, a public watchdog that monitors key projects. Phase one and two of HS2 were given a “red” warning by the watchdog. However, the link between Crewe and Manchester was given an “amber” warning, suggesting successful delivery of that part of the project is more likely. Story here

4. James Daunt, a guest on our Business Studies podcast, has spoken to The Wall Street Journal about how Barnes & Noble has overhauled its bookshop on the Upper West Side of Manhattan, which inspired the store run by Tom Hanks in You’ve Got Mail. The changes to the shop involve ideas that have worked for Daunt in the UK with Waterstones and Daunt Books. Hanks was asked for his view of the changes. “I’ve never been in the newly transformed B&N, but I approve the concept,” the actor says. You can find the WSJ piece here and our podcast interview with Daunt here

5. Hybrid working can create a toxic workplace culture because it has led to imbalance and trust issues between staff, according to new research by Harvard Business Review. Piece here

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Podcast…

The next episode of our Business Studies podcast will be sent to all Off to Lunch subscribers tomorrow morning and will be available on all podcast platforms. If you haven’t listened to our episode on Richard Harpin and Homeserve yet you can find it on Substack here, Apple here and Spotify here

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And finally…

I watched Barbie at the cinema over the weekend. I have never seen a film spark so much laughter and tears among the audience. The film is worthy of the hype and is one that everyone should (and probably will) see. I didn’t expect the film to be quite so profound. And now I can’t get the songs out of my head either…

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Best

Graham