The Schroders Mafia: Two Decades & Great Success Later

At the table was Sir Win Bischoff of Lloyds Banking Group, Robert Swannell of Marks and Spencer, Sir Richard Broadbent of Tesco, Gerry Grimstone with Standard Life, Dame Alison Carnwath of Land Securities, and lastly, BSkyB chairman Nick Ferguson. It was a smorgasbord of London’s big financial guns. But it was far more than that. Everyone present was alumni of the Schroders merchant banking that held court throughout the 80s and 90s. They even had a name: the Schroders Mafia. Now here they were 20 years later, reflecting on that past and how it led to their current prominence in British business.


Sir Win Bischoff, former head of Schroders in the glory days, recently retired as Lloyds chairman. While seen as a force behind the so-called mafia, many believe his departure is a positive one. One insider believes, “The old grandees, with multiple board seats, are running out of steam. Now the gene pool is widening and that has to be a good thing.”Bischoff was such a star operating in Hong Kong, Schroders shipped him to their London headquarters to reverse the firm’s then current downturn. Bischoff reconstructed Schroders, actually putting it ahead of competition like Warburg, Barings and Morgan Grenfell. Despite his positive impact, the firm still fell victim to London’s Big Bang reforms. They were acquired in 2000 by Citigroup. But not before the company had built a stream of long lasting relationships.There was a common understanding at the time that Schroders consisted of unique talent. Sir Richard has attested Bischoff was always on the lookout for personalities that differed from his own. Bischoff only wanted strong qualities that he respected. One of Bischoff’s picks, James Bardrick, current head of Citigroup UK, says Schroders “was diverse. It employed some super-bright, very posh people and some state and comprehensive-educated people like me. It was meritocratic before meritocracy in the City was the norm.”
The firm was also a frontrunner in promoting women. In the 90s, approximately a third of its senior directors were women, many of whom, including Dame Alison Carnwath, are among London’s top business personalities. It’s believed Schroders eclectic executive choices promoted a powerful unity. Many employed at the time described the allure of the company as low key, trustworthy and ego-less. Of course, this camaraderie also encouraged the protective culture that resulted in the Schroders Mafia.

Still, even now no speaks ill of the culture. At least, not any more. No one can disparage the fact that Schroders cultivated a team that today represents more chairman, investors and non-executives than any other bank. The closest parallel would be the impressive list of former Goldman Sachs bankers that have gone on to prominence as head of the U.S. Treasury, and control of the Bank of England and the European Central Bank. In fact, much like the Schroders Mafia, Goldman had its own moniker, the Vampire Squid. While many believe past Schroders relationships have played a huge part in executive successes, the alumni say their success is a result of their reputation for integrity in an industry seen as money grabbing, self-centered and thrill seeking. They also dismiss any ideas their successes are a result of the relationships. Marks and Spencer’s Swannell insists, “It’s not an old boys’ network. What unites us is the sense of trust between us. It’s held together because the culture is incredibly supportive.”


Though boardrooms like the old Schroders aren’t considered atypical today, with growing diversity, it’s still considered clubby. A new dominant network is being drawn from management consultancies. Networks still support alumni and the business of consultancy but ties are definitely looser. The succession at Lloyds is a prime example. Bischoff will turn chairmanship over to Lord Norman Blackwell. Blackwell previously worked at McKinsey and in government advisory roles. More non-executives are pulled from various consultancies. For example, RSA chairman Martin Schcluna is formerly from Deloitte, while non-executive Alastair Barbour is from KPMG. Transitions like this are encouraged. One seasoned headhunter has attested, “People are particularly keen on non-execs with a McKinsey background.” Another believes these non-executive candidates are “analytical and smart. And they tend to be experts in specific sectors, which are increasingly important as boards professionalize.” Still, not everyone is thrilled at the prospects this niche culture. One of London’s old guard that remains an active non-executive sees no reason to rise and applaud. “Do management consultants make good non-executives? There are exceptions of course, but generally I would say not. They tend to pontificate and be too executive, and that can be quite disruptive to management.”


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