Emilio Botín, executive chair of Banco Santander, died on Tuesday night. This news, and the announcement of his daughter Ana Botín as his successor, has sent ripples among hardline corporate governance advocates.
On one hand, the bank has lost a strong and visionary leader who built the bank from a small Spanish lender to a large financial empire with operations spanning Brazil, the UK, the US, Poland and Spain. On the other hand, a family member has been appointed to preside over the company for the fourth time.
But what if this is the right decision for the future of the business?
Ana Botín is highly regarded on her own merit. Having spent most of the past 25 years at Santander, the last four of which were running the UK operations, she is highly experienced and has steered the UK bank through some challenging times. Could this smooth transition actually mean greater stability for the bank and its investors? Isn’t this preferable to a long period of uncertainty as to who is running the bank?
At Hermes EOS, in line with other responsible owners, we encourage balanced and diverse boards with independent chairs and separate CEO roles. But without understanding the business, its challenges, its history and its people this could look like box-ticking. Over the years, we have built a fruitful relationship with Santander and have seen a number of changes in the right direction, in particular with regard to board refreshment, the introduction of a lead independent director and remuneration.
We hope that in her new role Ms Botin will inject fresh perspectives into the company and the Spanish market. The world is saying that she has big boots to fill, but based on her experience, and with long-term shareholder value in mind, the odds are on her side.
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