Carney’s Revamp Chief Drives BOE Shakeup as Staff Say ‘Gosh’

One third of the way through a three-year overhaul of the Bank of England, Charlotte Hogg is wondering how officials should judge whether it’s succeeding.

The 44-year-old chief operating officer of the U.K. central bank is at the vanguard of an unprecedented revamp unleashed on the three-century-old institution by Mark Carney, its first foreign governor. The role requires Hogg to try to square the circle of how to enhance and streamline a state-owned organization without losing its public-service ethos.

“Is the quality of what we’re doing -- or the effectiveness of what we’re doing -- getting better?” Hogg said on Monday in the first interview of her tenure. “We’ve done quite a lot of work” with the bank’s governing body “to think about what those metrics might be and it’s something we’d expect to report on over time in the annual report. It’s quite new for a public-sector institution to test itself in that way.”

One year after Carney unveiled his “One Bank” strategy to fuse departments and integrate policy functions following a review by McKinsey & Co., Hogg says the program is “on track.” The executive, sporting a black leather jacket in her cavernous office at the BOE’s citadel in London, has hung a copy of its founding charter from 1694 above her desk to help her mould initiatives to fit the public mission of 3,700 staff, who are sometimes overawed by the pace of change.

One Bank

“I come from a private-sector world, and the thing that’s different here for me is everyone, at some level, joined to do public service,” said Hogg. “In a private-sector institution you push through a lot of change and sometimes you over-rely perhaps on a kind of financial reward. You can’t do that here.”

Hogg joined the BOE in July 2013, the same month as Carney. Shortly after, he hired McKinsey and the resulting program has so far created a new management layer, prompted more joint meetings between its three main policy committees, harmonized pay, improved processes, and led to a common research agenda.

As Carney’s first major appointment, Hogg is the BOE’s inaugural COO in a role designed to take on day-to-day running of the bank, allowing the governor and his deputies to focus on expanded policy responsibilities. She handles finances, personnel, security, and information-technology operations, and has the same management grade as a deputy governor.

The scion of a British political dynasty, Hogg joined the BOE in 1992 before becoming a McKinsey consultant in Washington. Prior to returning to the bank, she led Banco Santander SA’s U.K. retail distribution operations. She says she is applying her commercial experience to the BOE.

Library Spat

“It’s too easy to say in public-sector institutions: ‘Oh, we don’t have the kind of metrics that private-sector institutions do,’” she said. “What we’ve done is to say: ‘No, that’s not right.’”

A staff survey carried out by McKinsey for the strategic plan showed that while the workforce felt dogged by bureaucracy and a “hierarchical” structure, they were motivated by “having a noble purpose.” The revamp must reflect that positive spirit within the bank, according to Hogg.

However, change isn’t always easy. In January last year, the BOE cut 100 jobs after a value-for-money review, which Hogg described as a “tough decision.” In May, her zeal for modernization hit a bump when a revamp of the central bank’s library met strong opposition from some staff. She suspended the plans pending further consultations.

“That’s a good example of where we didn’t probably take enough time to talk to all the colleagues,” she said. “I’ve learned from that.”

She has held more than 30 meetings with staff to garner feedback on reforms and said while most of it is positive, employees can wince at their breadth and speed.

‘Gosh’ Reaction

“What I hear sometimes is, ‘Gosh, there’s a lot going on,’” Hogg said. “Not every individual likes the pace, but we have a lot of responsibilities, we have to become a more effective organization, and I think the pace is important.”

Some of her proposals were also greeted with skepticism by the bank’s governing Court of Directors, with them stating at a meeting less than three months after she started that her list of human resources objectives was daunting and “might need to be less ambitious.”

“I’m lucky within my areas that I’ve brought on some very talented people,” Hogg said, citing the appointments of new finance and HR directors and a chief information officer. “What would have been daunting for one person to try and do is much less daunting when you’ve got a really talented team.”

Hogg’s family background is steeped in British politics, in contrast to her private-sector career. Her father served in the governments of Margaret Thatcher and John Major, her mother was an adviser to Major, and her grandfather and great-grandfather were both lord chancellors.

“I had thought at some point in my life I’d come back into public service,” Hogg said. “It’s more fun than I expected. I enjoy this job very much. I mean I always enjoy what I do, but I really think we’re making a difference.”

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE