More strife on the cards for Barrett

FRESH from his credit card gaffe, Barclays chief executive Matt Barrett faces an embarrassing clash with investors over his intention to become chairman. His plan flies in the face of best corporate practice.

Barclays is coming under increasing pressure to justify Barrett's promotion to replace Sir Peter Middleton in January 2005.

The group said it 'always intended' to give its reasons next year, well in advance of the boardroom shake-up, but will have to deliver sooner if it wants to soothe disgruntled investors.

The Association of British Insurers, which represents some of Britain's biggest shareholders, increased the urgency by writing to Sir Peter, demanding a 'full, clear and public' explanation of Barrett's promotion.

There are also calls for more non-executives to be appointed to the Barclays' board to strengthen the independent checks on its management.

Observers say the situation is a test case for new corporate governance guidelines drawn up by Derek Higgs. Under these new rules, promotion from chief executive to chairman is frowned on because of fears that it compromises boardroom independence.

Barclays said: 'We will publish our reasons that will be compliant with Higgs.'

Barclays argues that Barrett, who joined as chief executive in 1999 from Canada, will be an independent non-executive chairman because he is not a Barclays 'lifer'.

Finance director John Varley will step up to become chief executive.