Interview: Doug Webb, London Stock Exchange CFO

Doug Webb, CFO of LSE

We meet in a building with perhaps the cleanest, most freshly-vacuumed carpets muddy snow might ever have been ground into. A PR fusses over our yet-to-arrive subject’s alleged dislike of photoshoots and we are relegated from shooting him against a snowy Paternoster Square to a grey office lobby with an art installation depicting market movements with a bunch of plastic balls suspended on strings. (Even though it’s not hooked up to anything, most of the balls languish at the bottom.) London Stock Exchange Group’s Doug Webb appears from nowhere, unbuttons his jacket and casually asks where we want him.

This is Webb’s first interview since joining LSE as CFO last June. “I like to keep a low profile,” he says, grinning for the camera like a professional.

Perhaps he is aware of the siege mentality that put a few crow’s feet on the LSE’s face in recent years. Few expected to see the 300-year old icon of London’s global financial supremacy fighting off takeover bids from players with none of its cachet and then merging with a continental (and comparatively less international) player in Borsa Italiana. Now Webb wants to refresh the exchange. “We need slightly different skills and a different view,” he says.

This is the new financial face of one of London’s - the UK’s, the world’s ­ most distinguished brands. On the day we meet, it seems fortuitous the ex-CFO of defence and security giant Qinetiq, an FCA with a clutch of divisional and group FD roles under his belt in Europe and North America, is bedding into the LSE just as it looks for its next chief executive. Named as one of the possible successors to Dame Clara Furse, Webb insists he is still too immersed in getting to grips with the complexities of the exchange business to consider it. “I’m just focused on the job I’ve been brought in to do.

"I’m still going through the learning process ­ it’s much more complicated than it seems on the surface and I’m still very much at the beginning of that, so there’s plenty to keep me occupied now without having any thoughts on the longer term,” he says. At any rate, ten days after we met the exchange announced it had finally hired Furse 2.0 in Xavier Rolet, ex-CEO of Lehman’s France and the man who led the LSE’s strategic advisory group after its demutualisation in 2000.

If Webb sought a challenge, he chose the right time to join the exchange. The LSE stands accused by many of failing to keep up with growing competition, especially with the advent of the 2007 Markets in Financial Instruments Directive (MiFID) aimed at pan-European market liberalisation. Some say that despite being the world’s most important and well-known brand in its space, its technological and liquidity offerings just aren’t up to the job of 21st century equities trading. Last month, the Financial Times said it was “increasingly out of sync with the technology-savvy, cut-throat world of trading and exchanges.”

Irresistible challenge
It was these challenges that attracted Webb away from his role at Qinetiq when, he says, he had no intention of going anywhere. “I wasn’t looking to change jobs and I had been turning everyone else who approached me with offers away until that point, because there was still plenty to do there,” he reveals. But the LSE is a special sort of institution. It has this tremendous brand, so you have a real asset to work with and this great vision that it is the world’s capital market… the fact that we can help market participants to raise capital to improve their positions,” he says. “We’ve gone through the merger, so we’re going into a new phase. There’s a whole bunch of dynamics that were all part of the attraction.”

He likes the change to a sector with no safety net. “The LSE is in a tremendously dynamic market. From a personal perspective, being in an industry subject to that sort of change gives you a lot more ability to get involved and help manage the response to that change and to be very proactive in your job. The defence industry moves at a very different pace to the financial services industry.”

The technology question is one where Webb’s experience after almost a decade with Logica, a large IT services contractor, will be key. The race is on to provide the platform with the best liquidity, visibility and speed and reliability. LSE customers remember with crystal clarity the technical glitch that shut the entire exchange (and the Johannesburg Stock Exchange, which uses its TradElect platform) for all but the first and last 30 minutes of trading on 8 September last year ­ the day the US government announced its Fannie-Freddie bailout; the sound of jugular veins exploding in trading rooms reverberated across the globe as the opportunity to make a buck on briefly rallying markets was lost; the exchange denied the crash was due to its inability to handle increased trading activity, blaming a software issue.