The chairman of Land Securities, Britain’s biggest property company, likes the
direct approach. “Do you think I am scary and ruthless?” says Alison
Carnwath, giving me the same beady-eyed look that Dame Judi Dench’s M gives
Bond.
“Probably not,” I say, grateful there is a boardroom table between us.
“Glad to hear it,” she says in her distinctive, clipped tones, and then smiles
wickedly. “You know, if people are just trying to find the right words to
describe an average FTSE 100 female chairman, they are going to have to hang
around a generation to find out what characteristics they take on.”
She has a point. Carnwath, 56, is one of only three women now chairing FTSE
100 companies -- Baroness Hogg at 3i and Lesley Knox at Alliance Trust are
the others. And not many have gone before her. To make it to the top as a
woman, she probably has to meet male fears head on. And she can expect a bit
of extra coverage.
Yet the way Carnwath hit the headlines in May — after Land Securities reported
a £4.8 billion loss — raised eyebrows. She reportedly gave her chief
executive Francis Salway, a respected property veteran, six months to shape
up or ship out. That was only seven months after taking up her role, hence
the “scary and ruthless” epithets.
And now, with Land Securities’ interim results a fortnight away, everyone will
want to know: has Salway passed his half-year test? “Well, maybe he will
hand in his notice but I don’t think you are going to find him going
anywhere,” says Carnwath drily. “It was an exaggeration to say I gave him
six months, but certainly there is a truth in that we knew we had to take a
cold, hard look at how we acted as an integrated property company.”
And that, she says, is what Land Securities has done. The company, which
manages 2.7m square metres of commercial property, has raised more money,
shuffled its executive team, reorganised the board and set its priorities.
First, it will reduce its debt. Then it will reinvest to grow.
“We’re going to stick to our knitting, stay in the UK and get the timing of
our development programme right, and work as hard if not harder at the asset
management side,” says Carnwath. “Let me explain it this way, a slightly
tighter management can produce slightly more improved results.”
But wasn’t it all a bit unusual, a FTSE 100 firm washing its dirty linen in
public like that? Carnwath is careful not to admit that the story ran away
from her — she seems more wryly amused by it. “People in the City did ring
me up and say, ‘Crikey, you can’t have liked that, Alison,’ but you know, I
don’t think I even received a call from a headhunter. . .”
Carnwath likes stirring it up. Taking tea in Land Securities’ boardroom above
the Strand in London, she seems both poised and mischievous. Her manner is
brisk, her grey hair short, her outfit a green Austrian two-piece. She looks
like she should be taking a party of “gels” hiking in the Tyrol.
However, former colleagues say it would be a mistake to underestimate her. She
made her name in the City as an investment banker, first with Schroders —
where Land Securities was a client — then at Phoenix, the advisory boutique
that brokered a number of high-profile, financial-services deals.
She may be queen of the tart one-liner, but she is also, like many investment
bankers, formidably task-orientated. The intense press scrutiny of Land
Securities that she encouraged could have been intentional, to goad her top
team into action. Equally, say friends, if she does have a weakness, it’s
shooting from the hip, before the gun has left the holster.
Carnwath dismisses that. She says her spikiness complements Salway’s
seriousness. “I am quite provocative. I like to delve into things and
Francis responds magnificently to that. He is very quiet and I am very
noisy, he is reasonably introvert and I am reasonably extrovert — that can
work very well.”
So how does Carnwath explain Land Securities’ disastrous slide into the red?
It may have been exaggerated by new accounting rules — which mean property
values have to be incorporated into profit-and-loss numbers — but perhaps
the company should have seen the storm coming.
“Well, of course we could have done more if we had sold more earlier, at the
top of the market, but how smart are people?” says Carnwath. “It tells you
... well, we’ve always got to make sure we have more liquidity, these
balance sheets are tied up in enormous assets and if there aren’t any buyers
they get worth less and less.”
As for the loss, it looks worse than it is. “Our accounting system requires us
to put it up and down, and this creates headlines. But the bricks and mortar
are still there; they are not a toxic asset like banks have. The values will
go back up.”
But there is a perception that all has not been well inside Land Securities,
which owns an array of assets from retail parks to office blocks. It took a
year to sell Trillium, its property outsourcing arm, in January — for less
than it had originally hoped — to help reduce debt.
Then in June the company announced the departure of one of its most valued
executives, Mike Hussey, head of its London portfolio, after plans to
demerge his division were scrapped. There were reports of friction between
Hussey and Salway.
So was Hussey pushed or did he leave of his own accord? Carnwath doesn’t dodge
the question. “In the long run up to demerger, the gentleman you are talking
about had been effectively told he was going to be running his own FTSE 100
company. He had been pushed to the top of the hill and he didn’t want to
come down again, but he was very sensible about it, too. We were mindful of
his skill set, and we knew that we would miss him, but he needed to move on
— he knew that too.”
So he left, and Land Securities pulled in Great Portland’s highly rated Robert
Noel to replace him. “It’s a real coup for us,” says Carnwath. “He’s a great
guy to get hold of.”
That, combined with a £756m rights issue and the paying down of debt, has
convinced the markets that Land Securities is back on track, she says. This
month’s interims will reinforce that. “It has been a peculiar nine months,”
she admits. The future, though, looks good.
Carnwath is not short of experience. She has sat on Land Securities’ board
since 2004 and has chaired Vitec, the engineering business, and MF Global,
the derivatives brokerage. She has also seen service on the boards of Man
Financial, National Power, Arcadia, Friends Provident, Gallaher and
Nationwide, among others.
She says she inherited her love of business from her father, who ran their
family printing firm in Burton on Trent. An only child, she went to boarding
school at 10, read German and economics at university and started her own
business career at Peat, the accountant, before jumping to Lloyds
International and Schroders.
In the meantime she married, divorced, but kept her husband’s name Carnwath —
her maiden name is Tresise. “Old Cornish. Why my great-great-grandparents
moved to Burton on Trent, heaven knows.”
Those who worked with Carnwath at Schroders say she developed a style that was
punchy and direct. “She’s a very engaged, very intense investment banker,
with great instinct and judgment,” says Robert Swannell, vice-chairman of
Citigroup Europe. “She’s also terrific fun.”
It was at Schroders that she first came into contact with Land Securities,
which habitually carries large debts to fund acquisitions and development.
She says any chairman has to be comfortable with the financial complexity
underpinning the group. “And, yeah, I’m comfortable on the debt side and
I’ve got people round me who are very comfortable on the asset side. Also, I
remember from Schroders that Land Securities was a very special client.
People admired its culture. It was thoughtful. It had integrity. They were
decent people to deal with, and that lives on.”
Between then and now Carnwath has jumped around, first to Phoenix, then into
its acquirer, Donaldson, Lufkin & Jenrette, the American investment
bank. She moved to New York for a while, and never found being a woman in
the very male preserve of investment banking a hindrance.
Because she’s tougher than the blokes? She laughs. “No, I don’t think I have
had to over-compensate. Maybe I have done it without knowing it, but I don’t
think so. I am just myself.”
So why are women so poorly represented in the City, and on FTSE 100 boards?
Are they held back unfairly or just not interested? “Both,” says Carnwath.
“There are undoubtedly some macho institutions where women have not made the
progress they should have done, but also employers find women do go off and
have babies . . .”
She pauses. “Actually, this is almost unprintable stuff. There are lots of
women now in their thirties running really good businesses, but in their own
environment. The reason I am not a good person to talk to about this is that
I have been brought up in an entirely male environment, and feel very
comfortable in it. And I never had kids, it just didn’t happen.”
Now she is rich enough not to have to work again — she has even built her own
holiday home on the Bahamian island of Eleuthera. Yet she says she likes
complexity and she likes to be involved. Maybe she likes the money, too. She
pulls in close to £800,000 in non-executive fees.
Others say she is a change in style at Land Securities from Lord Myners, its
previous chairman. He devoured paperwork. Carnwath prefers to talk her way
round the business, taking first-hand accounts from the people involved.
And her relationship with Salway, despite those threatening headlines, is
good. Salway himself backs that up. “Alison’s enthusiasm for the business is
very evident to all our people, and that’s motivating and energising.”
Next she and Salway have to convince the City that the company can emerge a
winner from one of the property sector’s worst-ever slumps. Last week it
announced a £200m commitment to two big London developments, without bank
borrowing. That’s just the start.
Investors want to see how Land Securities is going to return to profit
long-term, what else it is going to invest in, and whether it is going to be
hit by more defections as ambitious executives seek to set up their own
funds while property is cheap.
And they will want to see that she and Salway get on. Carnwath herself is
typically brusque on the notion that she roughed up her chief executive in
any way. “It could have been difficult but I like to think it’s all blown
over now,” she says bluntly.
Then she gives me another sharp-eyed stare. In other words, get over it.
The life of Alison Carnwath
Vital Statistics
Born: January 18, 1953
Marital status: divorced
School: Howell’s School, Denbigh, North Wales
Universities: Reading and Munich
First job: accountant at Peat
Salaries: £300,000 from Land Securities, £300,000 from MF Global,
£100,000 from Man Group, and £75,000 from Paccar Inc
Home: Chelsea, plus holiday homes in Devon and the Bahamas
Car: “I haven’t got one”
Film: “Any Bond movie”
Book: The Forsyte Saga by John Galsworthy. “Remember, the first part is
The Man of Property”
Music: Puccini and Verdi
Gadget: stress ball
Last holiday: Alpbach, Austria
Working Day
The Land Securities chairman wakes at her flat in London’s Cadogan Gardens at
7am and often goes for a run in Hyde Park. Alison Carnwath then takes a cab
to her office at Land Securities’ HQ near Charing Cross for a 9am start. She
also keeps an office at Lexicon Partners, where she is a senior adviser.
“I usually go straight into meetings, otherwise I am visiting our properties,”
she says. “No, I don’t cut ribbons, we bring in the mayor for that. We have
200 or so properties and 600 staff.”
The biggest surprise of being a FTSE 100 chairman, she says, is how many
people want to meet her. “Perhaps it’s because women chairmen are a new
species.” She works till after 6pm, and often dines at her favourite
restaurant, Roussillon in Pimlico. “Walking distance from home, nice
truffles and wine list.”
Downtime
Alison Carnwath likes to relax at her holiday home in Devon, which she shares
with her boyfriend, Peter Thomson. “Peter’s an excellent cook, so there’s
usually a lot of people turning up to eat. We are happily not married, and
have lived together for 22 years.”
She likes to ski in Alpbach, an old-fashioned Austrian resort, and
occasionally plays golf and tennis. She also has a holiday home on Eleuthera
in the Bahamas.
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