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Authors: Ray Perman, Alistair Darling
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moved him around, so that by the time he reached the top
nearly 20 years later he had acquired a broad experience of practical banking.
Pattullo was intelligent, rather than clever, thoughtful rather than impulsive. By temperament he was a quiet, cautious man, not given to overstatement. I had known him for a couple of years by
the time he was appointed to the Treasurer’s position and I interviewed him for the
Financial Times
. I asked him his ambition and was surprised by the answer:
‘To make this the best-performing bank.’
‘The best-performing bank in Scotland?’ I asked.
‘The best-performing bank anywhere,’ he said.
His leadership marked a radical change in character and culture. Previously the Bank had been constrained by its hierarchy. Information had a long way to climb to get from the customer to top
management and decisions wound their way down through many layers before being implemented. Pattullo was open and approachable and, in some ways despite his middle-class upbringing, unconventional,
prepared to consider new ways of doing things and to listen to his subordinates as well as to his peers. For the senior executives who wanted to get the new chief’s ear there was another
marked change. Unlike previous generations of top Scottish bankers, Pattullo was not a golfer. He played tennis and had a court built in the garden of his Edinburgh home. Several of his senior
lieutenants started to work on their serves.
By the time he became Treasurer, he had had two decades to observe how the Bank’s management structure inhibited innovation and made decision-making cumbersome. He introduced a Management
Board 1 , consisting of the top half-dozen or so senior executives who met regularly to discuss the progress of the Bank in their various
fields. Everyone, whether they were in International, Treasury, managing the East of Scotland business, the West or London, got an overview of what was happening, where problems might occur and
where opportunities were being presented. This group becamethe engine of change within the Bank, reinforced by the fact that most of its members had offices on the first
floor of the headquarters building on The Mound. If they were in the office they took coffee together and often lunched together.
Risk and Pattullo redesigned the governance of the Bank. They created a clear separation of the functions of the main board – now focused on strategy and a role as trustees of the
proprietors’ (shareholders’) funds – and the Management Board, which ran the Bank day to day. To link the two, the Treasurer sat on the main board as a full member, and the
Governor attended the Management Board. The minutes of Management Board meetings were made available to directors, and executives attended the main board meetings, sitting at the back and silent
unless asked to speak.
Pattullo also ended the stranglehold the Inspectors’ Department had over innovation and promotions and focused it on internal audit. He promoted younger, able managers and he changed the
culture, abolishing the Business Development Unit, a head office team supposedly responsible for finding new opportunities, and sent a circular to all managers telling them they were all
responsible for growing the business. No more would initiative be slapped down: ‘The Treasurer has let it be known that he is open to ideas from anywhere,’ one young manager told me
with enthusiasm at the time.
Tom Risk was appointed Governor in 1981 and the two men formed a formidable partnership at the top of the Bank, each passionately committed to its independence and to making it a force to be
reckoned with. When the chairman of the Distillers’ Company, Scotland’s biggest whisky producer and by common consent a poorly managed dozy giant, came to suggest that it might buy Bank
of Scotland, Risk politely but promptly walked him to the door and closed it behind him. A more credible threat was posed when Barclays, which
nearly 20 years later he had acquired a broad experience of practical banking.
Pattullo was intelligent, rather than clever, thoughtful rather than impulsive. By temperament he was a quiet, cautious man, not given to overstatement. I had known him for a couple of years by
the time he was appointed to the Treasurer’s position and I interviewed him for the
Financial Times
. I asked him his ambition and was surprised by the answer:
‘To make this the best-performing bank.’
‘The best-performing bank in Scotland?’ I asked.
‘The best-performing bank anywhere,’ he said.
His leadership marked a radical change in character and culture. Previously the Bank had been constrained by its hierarchy. Information had a long way to climb to get from the customer to top
management and decisions wound their way down through many layers before being implemented. Pattullo was open and approachable and, in some ways despite his middle-class upbringing, unconventional,
prepared to consider new ways of doing things and to listen to his subordinates as well as to his peers. For the senior executives who wanted to get the new chief’s ear there was another
marked change. Unlike previous generations of top Scottish bankers, Pattullo was not a golfer. He played tennis and had a court built in the garden of his Edinburgh home. Several of his senior
lieutenants started to work on their serves.
By the time he became Treasurer, he had had two decades to observe how the Bank’s management structure inhibited innovation and made decision-making cumbersome. He introduced a Management
Board 1 , consisting of the top half-dozen or so senior executives who met regularly to discuss the progress of the Bank in their various
fields. Everyone, whether they were in International, Treasury, managing the East of Scotland business, the West or London, got an overview of what was happening, where problems might occur and
where opportunities were being presented. This group becamethe engine of change within the Bank, reinforced by the fact that most of its members had offices on the first
floor of the headquarters building on The Mound. If they were in the office they took coffee together and often lunched together.
Risk and Pattullo redesigned the governance of the Bank. They created a clear separation of the functions of the main board – now focused on strategy and a role as trustees of the
proprietors’ (shareholders’) funds – and the Management Board, which ran the Bank day to day. To link the two, the Treasurer sat on the main board as a full member, and the
Governor attended the Management Board. The minutes of Management Board meetings were made available to directors, and executives attended the main board meetings, sitting at the back and silent
unless asked to speak.
Pattullo also ended the stranglehold the Inspectors’ Department had over innovation and promotions and focused it on internal audit. He promoted younger, able managers and he changed the
culture, abolishing the Business Development Unit, a head office team supposedly responsible for finding new opportunities, and sent a circular to all managers telling them they were all
responsible for growing the business. No more would initiative be slapped down: ‘The Treasurer has let it be known that he is open to ideas from anywhere,’ one young manager told me
with enthusiasm at the time.
Tom Risk was appointed Governor in 1981 and the two men formed a formidable partnership at the top of the Bank, each passionately committed to its independence and to making it a force to be
reckoned with. When the chairman of the Distillers’ Company, Scotland’s biggest whisky producer and by common consent a poorly managed dozy giant, came to suggest that it might buy Bank
of Scotland, Risk politely but promptly walked him to the door and closed it behind him. A more credible threat was posed when Barclays, which
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