Royal Bank of Scotland (RBS) has appointed the deputy chairman at Northern Rock, the troubled nationalised lender, as one of three new non-executive directors in a move aimed at pacifying investors.

Stephen Hester, 47, who is also chief executive at British Land, the commercial property group, will step down from Northern Rock on October 1, when he will join RBS's 10-strong board of non-executive directors.

Northern Rock said today that the nature of Mr Hester's role as deputy chairman at the bank had changed after it named Gary Hoffman, the former vice president at Barclays, as its new chief executive.

Mr Hoffman's appointment also means that Ron Sandler, currently executive chairman at Northern Rock, will now step back into a "more conventional" non-executive role.

RBS also announced today that John McFarlane, the former chief executive at Australia and New Zealand Banking Group, will become a new non-executive director alongside Arthur Ryan, previously chairman at America's Prudential Financial.

Investors have been pushing Sir Fred Goodwin, RBS's chief executive, and chairman, Sir Tom McKillop, to strengthen the bank's board after it recently reported a £692 million first half loss.

Shareholders in RBS are also understood to be angry about a lack of succession planning on who will replace Sir Fred or Sir Tom when they eventually step down.

Prior to the loss, RBS was forced to raise £12 billion through a rights issue after spending €71 billion as part of a three-way consortium to buy ABN Amro, the Dutch investment bank, just as the UK was beginning to slip into the current slowdown.

Following the interim loss, Legal & General, a shareholder in RBS, said Sir Tom and Sir Fred had "a lot to answer for".

RBS was keen to bolster its non-executive experience in America and Asia, culminating in the appointment of Mr McFarlane and Mr Ryan.

Existing non-executives, Lawrence Fish and Charles Koch, will leave the RBS board and, once the new appointees join, RBS's non-executive board will comprise 12 directors excluding Sir Tom. The bank will also have five executive directors.

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