UK banks face challenge in hiring directors amid industry revamp

Britain's major lenders may find it hard to hire dozens of directors that are required as part of a radical reshape of the industry aimed at protecting it from future investment bank crashes.

The country wants banks such as HSBC Holdings, Barclays and the British arm of Spain's Santander to ring-fence their retail units from their wholesale operations, including creating a separate board for their retail divisions that will be independent of the parent group.

But the banks may struggle to fill these boards because the directors will be more exposed if things go wrong, particularly under new rules that will make it easier for the regulator to hold senior bankers to account for misconduct.

"It may be hard to find directors for these ring-fenced banks," said Simon Gleeson, a partner at British law firm Clifford Chance. "You're practically volunteering for the role of scapegoat."

Britain wants to make directors more accountable and responsible for their actions, aiming to prevent a repeat of the 2007-09 financial crisis when taxpayers spent tens of billions of pounds bailing out major banks whose directors walked away with their pensions intact.

"We should be under no illusions: finding enough people with the appropriate experience who are not tainted by the financial crisis and who are willing to take on the extra responsibility and culpability will be challenging," said Omar Ali, head of British banking and capital markets for consultancy EY.