Openreach boss defects to Nationwide

NATIONWIDe building society has appointed Joe Garner, the boss of BT’s Openreach division, as its chief executive.

Garner, 46, previously ran hSBC’s operations in the UK and has also worked at consumer goods giants Procter and Gamble and Dixons. his experience in digital business and retailing attracted Nationwide, which wants to improve its customer service and to offer new ways of banking through mobiles and smart phones.

Garner (pictured) replaces Graham Beale, who in May announced his intention to retire. his package is likely to be similar to the £2.39m earned by Beale last year. he will receive a payment to compensate him for losing performance-related pay from Openreach, though this was described as ‘modest.’

Beale’s pay, which rose to £3.3m last year once a payout from an old incentive scheme was included, has angered some members who see high rewards as being at odds with mutual values.

But the departing chief executive has won plaudits for steering Nationwide through the financial crisis, when the mutual rescued a number of struggling smaller societies including the Dunfermline and the Chelsea.

Challenges facing Garner when he arrives in the spring include winning more current account customers and helping pilot the society through a thicket of new regulations and tax rules.

Nationwide has been protesting about changes to the bank levy, which has been replaced by a corporation tax surcharge that will leave it significantly worse off.

Chairman David Roberts said Garner ‘understands mutual values’, adding: ‘he will take what Graham Beale has built and continue with it. This is not about radical change but about developing mutuality and making it tangible for a modern age.’

Garner’s departure comes at an interesting juncture for BT as telecoms regulator Ofcom is investigating whether Openreach should be spun off from its parent. Rival companies say BT has an unfair advantage due to its ownership of Openreach, which controls the cables and pipes used by internet service providers. BT says that by being part of a bigger group, Openreach has access to a £500m annual research budget and to investment capital.