Bank of England Chief Operating Officer Charlotte Hogg has been advised to scale back her ambitions by the central bank’s governing body as she seeks to implement common staff policies across the institution.
Just months into the job, the former Banco Santander SA (SAN) and Morgan Stanley (MS) manager is pushing human resources objectives that the BOE’s Court of Directors says are “daunting.” Those goals “might need to be less ambitious,” according to minutes of the board’s Sept. 25 meeting, published by the BOE on its website yesterday.
The three-century-old BOE is undergoing unprecedented change under Governor Mark Carney, who has brought in McKinsey & Co. to conduct a review of strategy. Hogg told the Court the “main immediate challenge” was integrating the pay policy of the absorbed Financial Services Authority with that of the BOE after the central bank took over banking regulation this year.
“An immediate issue would arise in the annual salary reviews, where the FSA bonus had historically been much larger than the bank’s,” the Court said in the minutes. Court member Michael Cohrs said the BOE should register pay integration as “one of the top risks,” the minutes said.
Management of staff talent and culture were other priorities, Court members said.
“Directors also asked what (beyond remuneration policy) was being done to deliver cultural integration and common bank values,” the minutes said. “Ms. Hogg said that an exercise to define bank values had been paused but would be addressed.”
Hogg, a former McKinsey employee, said she was “surprised” to find that the BOE, unlike its Prudential Regulation Authority unit, didn’t have “explicit performance ratings for staff,” according to the minutes.
Hogg started at the BOE on July 1, the same day as Carney, and has since initiated a “value for money” review led by Deloitte LLP to look at the institution’s information technology and human resources operations. She is also leading the McKinsey review on strategy.
The minutes show Carney emphasized the need for “synergies” between the Monetary Policy Committee (UKBRBASE), the Financial Policy Committee and the PRA board. It cited the housing market, “which had received much attention and where all three policy boards were engaged,” the minutes said.
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