As part of its turnaround,Standard Chartered(LSE: STAN)has completely overhauled its management team. Chief executive Peter Sands is leaving the bank, to be replaced byWilliam T. Winters, the former head of JPMorgan Chases investment bank. Whats more, a number of the banks regional managers have been replaced in a shake-up of leadership.
Butits difficult to try and assess the calibre of Standards new management team. Indeed, all of Standards new managers have a wealth of experience in the banking industry, although trying to turn around a struggling bank could really test their skills.
Still, the bank has already laid out its key goals for recovery. Its targeting aCommon Equity Tier 1 ratio of 11% to 12% andsustainable cost savings of more than $400m this year. The group is looking to slash costs by $1.8bn over the next three years with up to 2,000 jobs set to go during 2015.
Unfortunately, Standards turnaround plan is being hampered by a number of factors outside of the banks control.
For example, higher charges for bad loans and credit risks continue to weigh on profits. Demands from regulators and higher legal costs are also weighing on the bank.
Its these uncontrollable factors that will test the new managers skills.
Toughest job in Britain
Centrica(LSE: CNA)recentlyannounced the appointment of Mark Hodges as managing director of British Gas, ending an 11-month search for a new leader.
It is difficult to try and put into words how important Mark Hodges is for Centrica. As the head of British Gas, Mr Hodges will be responsible for Centricas largest division British Gas generates just under 50% of Centricas operating profit.
However, British Gas is also a problem child, and the division is facing wave after wave of criticism from the media and politicians over energy prices.
The question is, does Mr Hodges have the experience required to take on the media and improve British Gas image?
As Mr Hodges comes from an insurance background, it certainly doesnt seem like it. Hes joining Centrica fromspecialist insurance broker, Towergate, which he joined during 2011 after 25 years as asenior executive atAviva.
So only time will tell if Mr Hodges is cut out for, what has been branded, one of the toughest jobs in corporate Britain.
Changing habits
Ivan Menezes becameDiageos(LSE: DGE)chief executive in 2013 and so far hes failed to impress.
During the first three months of this year, sales fell in all of Diageos marketsapart from North America and Africa. Sales in North American rose 0.9% compared to estimates that called for growth of 2%.
However, falling sales reflect one of Mr Menezes initiatives to reduce stock building. Over the long term, this initiative should reduce levels of inventory at Diageos wholesalers and retailers. This should decrease sales volatility and improve the companys understanding of customer trends.
Nevertheless, falling sales due to inventory re-adjustments are not Diageos only problems. The company is also fighting a legal battle withVijay Mallya, chairman of IndiasUnited Spirits, which is now 55% owned by Diageo.
Questions are being asked about a number of suspect payments between United and its parent company, owned byVijay Mallya. Mr Mallya haspromised to challenge Diageos findings regarding the payments, and resist efforts to oust him.
All in all, it seems as if Diageos management is letting shareholders down.
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Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has recommended Centrica and Diageo (ADR). We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.