With Marcus Agius poised to step down, Sir Michael Rake is seen as the most natural stand-in chairman at Barclays
When he’s not visiting his 120-hectare polo pony stud farm in Argentina, chairing the governors of Wellington College or speaking as William Pitt fellow of Pembroke College, Cambridge, Sir Michael Rake is the senior independent director of Barclays.
With Marcus Agius on the brink of stepping down as Barclays chairman, Rake will be a pivotal figure in the boardroom and is seen by some as the most natural stand-in chairman. But his busy diary means that such a move could be difficult, particularly as the City regulator, the Financial Services Authority, would need to approve any such move.
With Agius on the way out, Rake will be a crucial conduit between furious investors and the boardroom. He is a serial boardroom director, serving as chairman of telecoms group BT and budget airline easyJet, as well as on the boards of Barclays and the American publishing house McGraw-Hill and a number of other institutions. He also chairs the private equity oversight group, the Guidelines Monitoring Committee. Rake, 64, has already had to stand down from the board of the Financial Reporting Council because his many boardroom roles sat uneasily with corporate governance rules.
Despite flunking his accountancy exams the first time round, Rake became Britain’s best-paid accountant. He chaired KPMG International, one of the Big Four accounting firms, from May 2002 until September 2007.
He was paid £3.6m in 2006, when he stepped down as head of the UK operation in October, and was awarded a knighthood in the 2007 new year honours for “services to accountancy”. But shortly afterwards two tribunal judgments emerged, detailing his firm’s intricate schemes to deprive the UK exchequer of tax. KPMG came up with clever ways of sheltering £156m from the taxman on behalf of 60 British millionaires. A Guardian investigation had previously found a number of potential conflicts of interest in KPMG’s dealings with the British taxpayer under Rake’s chairmanship. The accounting giant denied the accusations.
During Rake’s time at the helm of KPMG, the firm was also embroiled in the largest-ever tax shelter fraud case in the US. In August 2005, it agreed to pay $456m (£290m) in fines after admitting to creating tax shelters that generated at least $11bn in phony tax losses that cost the US at least $2.5bn in unpaid taxes. But Rake was not among the nine individuals named in the indictment, who included KPMG’s former deputy chairman and two former heads of KPMG’s tax practice.
As a boy, Rake harboured ambitions to become an RAF pilot, like his father, but his dream was thwarted by a skin allergy. Instead he joined auditing firm Turquands Barton Mayhew in 1968, followed by KPMG in 1974 because he wanted to escape from Britain.
“I had a place to do zoology and medicine [at university] but I wanted to travel,” he told the Daily Telegraph in 2007. He worked in Europe before moving to the Middle East in 1986 to run the practice for three years. Back in London, he became a member of the firm’s UK board in 1991 and had a number of leadership roles before being elected UK senior partner in 1998.
Rake took a large pay cut when he gave up accounting to join BT as chairman in 2007. As chairman of easyJet since 2010, he has been embroiled in rows with the no-frills airline’s founder and largest shareholder, Sir Stelios Haji-Ioannou.
At the annual meeting in February, he fought back and accused the disgruntled investor of a campaign of “inappropriate and defamatory assertions and innuendo” against the carrier’s executives. Rake and three other directors were nearly voted off the board by Haji-Ioannou and his family, who control 37.5% of the shares, and were only saved by an exceptionally high voter turnout.
Rake, married with four sons, keeps horses at his Oxfordshire home and has formed a polo team.
He is a member of David Cameron’s business advisory group, but has also been closely involved with the Britain in Europe campaign and wrote the foreword for a 2003 pamphlet entitled How to Join the
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