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Friends Provident CFO Evelyn Bourke on driving a pensions super-group

Photography: Anton Hammerl

Very unusually for someone at her level and with her
experience, Evelyn Bourke is clearly uncomfortable posing for photos. Her stiff
grimace and rod-straight posture risk giving the shots a harshness verging on
unkind.

But the spotlight is precisely where Bourke has been since 11 August this
year, when, four months after joining Friends Provident as CFO, the pensions
group surrendered its independence in agreeing to be acquired by Clive Cowdery’s
Resolution for £1.8bn. The deal finalised on 5 November and saw Friends
delisted, superceded in the FTSE-100 by Resolution and reborn as its first
privately-owned subsidiary, Friends Provident Holdings. Cowdery’s long-held
dream of building a super-sized life and pensions giant by buying up other major
players in the market has stepped on to the road to reality with the Friends
acquisition. The aim in the next couple of years is to bolt some of those onto
Friends -­ and exit with a very tidy profit.

Resolution’s lack of an operating business makes this one of the easier M
&A transitions.

“Resolution is basically an M&A machine and doesn’t come with an existing
entity which we have to be merged into, but there’s quite a bit of knitting
together the corporate governance ­ making sure you have one joined-up set of
delegated authorities so that on day one, people generally know what’s what and
where to go,” she says.

As Resolution got its deal on the second try (the first bid in 2007 by its
previous incarnation, Resolution plc, fell through when Standard Life
intercepted by tabling an offer for Resolution. The deal fell through and
Resolution was bought by Pearl Group in 2008 – Cowdery set up the new Resolution
shortly afterwards), Friends got to be at the front of inevitable industry
consolidation and Bourke landed one of the UK’s most exciting and multi-faceted
finance jobs. “We get to be the platform; we get to set the model for the
future,” she says.

She continues to look after a 250-strong finance team and 50 risk and
compliance staff, and joined the holding company’s operating board on 5 November
alongside CEO Trevor Matthews, who she followed from Standard Life where they
were respectively CFO and CEO until mid-2008. But the CFO piece is merely the
nucleus of a much more influential position she has acquired.

On target
As a member of Resolution’s Life Consolidation Advisory Group, she is tasked
with identifying and reviewing potential acquisition targets, working out how
they might fit with Friends and where the value will be in the merged entity. In
that, she will work closely with the Resolution team, including Cowdery,
ex-Financial Services Authority chief executive John Tiner, CFO Jim Newman and
head of mergers and acquisitions Ian Maidens (who, along with the rest, are also
the owners of Resolution Operations, to which the advisory group reports).

Through that, Bourke has a once in a lifetime opportunity to lead the
reshaping of her industry and turn the pressures of regulation, such as the
Solvency II capital adequacy directive, into opportunity for Cowdery’s club -­
while notching up priceless buy-side experience of M&A among publicly-quoted
businesses for an organisation with £310m in cash to play with.

Setting out how she will make the finance function a leading facilitator in
Cowdery’s big idea gets her going. Eyes light up, arms uncross and start to
gesticulate. “Where it gets really exciting is when the next acquisition comes
along because that will require analysis, evaluation of how the companies fit
together, putting together detailed plans on how you might integrate things and
at what pace you integrate ­- if you do integrate,” she says.

Make it happen
While she won’t comment on rumours that Resolution is preparing a New Year
approach to Lloyds Banking Group-owned Clerical Medical, Bourke says that
Cowdery’s Guernsey-domiciled business is “keen to make at least one thing happen
in 2010.” And she is ready for it. “The most exciting part of the role is really
driving the business performance, identifying where there might be synergies,
market opportunities or opportunities to do deals that increase new business.
It’s understanding what profitability you can deliver from this business, how
you can improve it, identifying ways you can make the balance sheet work better
for the company and the shareholders,” she says. “It’s at that strategic
front-end where you can really measure how much you’re actually adding to the
bottom line and driving the value through the balance sheet.”

Clearly not a showy person, perhaps reserved in the manner you might expect
from an actuary, it is hard to picture Bourke defending her opinion against the
force of Cowdery’s personality until you see the depth of experience on her CV.
She is now on her third CFO or FD job, having been made group FD at St James’s
Place insurance spin-off, Nascent, in 2001 – before becoming COO – and she was
promoted into the CFO role at Standard Life Financial Services from serving as
group actuarial director. Switching to a mini-career in board-level financial
services consulting before joining Chase de Vere Financial Services as managing
director in 2004 shows an entrepreneurial flair that many FDs may lack, while
having joined Standard Life in 2005 as group strategy and planning director
gives her the breadth of grown up, non-financial management experience that will
bear fruit in her current role. Formative years at Tillinghast Towers Perrin,
where she became a principal and spent a lot of time covering M&A deals, are
also useful.

“I was often at the table when those transactions were being conceived and
negotiated and was often closely involved in the due diligence,” she says. “But
I didn’t have that much direct involvement with the post-merger integration
stuff, the real heavy lifting about how to combine organisations.”

Final frontier
That will happen at Friends. Her ambition is to re-list the enlarged Friends as
its chief executive.
“I hanker after a CEO role and certainly want to be a candidate for it,” Bourke
admits. “It’s where you get the maximum opportunity to shape things. You’re in
the driving seat. It’s also clearly the highest risk [role] because you are even
more in the firing line than the CFO,” she admits. “That’s something that’s
still an unfulfilled desire. It would be very rewarding having been part of
Friends’ de-listing to take it back to the market a stronger and more formidable
player, to see it through.”

It’s a fairly safe bet that Resolution will look to pull off a big move in
2010, so Aviva, Legal & General, Old Mutual, the Prudential and Standard
Life will be watching their backs. Standard Life, in particular, may be feeling
vulnerable since Friends’ CEO Matthews was CEO of its principal operating
business until mid-2008 while Bourke was its UK financial services CFO until her
resignation last November; the pair worked very closely together. She has worked
equally closely with Standard Life’s CEO-designate, CFO David Nish and as
Resolution plc was almost gobbled by it three years ago, Cowdery knows it well.
Friends’ board also has first-hand inside knowledge of Legal & General by
way of independent director Robin Phipps’ time as an executive director there.

Interestingly, all six of these companies installed new FDs or CFOs in the
past year, with the new hires mostly coming from those same six companies.
Bourke’s appointment came at the same time the Pru’s FD Philip Broadley departed
for Old Mutual, while Norwich Union’s Nic Nicandrou took over at the Pru this
October as Willis CFO Patrick Regan joined Aviva. David Nish’s deputy CFO Jackie
Hunt was made interim group CFO at Standard Life in November.

Bourke says the Friends job came to her through a headhunter but doesn’t deny
that knowing the new CEO smoothed the course. “Obviously things started to move
when Trevor resigned from Standard Life, but it didn’t at that point necessarily
present itself that I would be approached about the CFO job,” she reveals. “When
I was approached that autumn, I was immediately very interested. Having been FD
of the biggest operating entity in Standard Life -­ if you measure it in balance
sheet terms, it was probably 70% of the group -­ and worked extremely closely
with two group CFOs, I felt I was ready for that plc CFO role. I felt I would
like that number two job and Trevor provided that opportunity. I really wasn’t
going to say no.”

Friends reunited
In fact, her arrival at Friends is something of a reunion. Matthews aside,
Bourke is a long-time associate of Cowdery having met him while he was still at
Scottish Amicable. She and Resolution’s Maidens worked together while both
principals at actuarial firm Tillinghast in the 1990s.
“I know Clive going way back. He is a larger than life, extremely colourful,
extremely energetic, extremely dynamic character ­ what he did at Resolution plc
was amazing. You can’t take that away from him,” she says of the controversy
around his views on corporate governance. “He’s a character that’s easy to paint
in terms that make him jump off the page, but that is the guy.”

She may also empathise with Cowdery, Tiner and Maidens by way of questions
over their professional reputations. Tiner has come under fire following the
report into the FSA’s handling of Northern Rock’s demise while he was head of
the regulator. An FSA investigation this March looked into ‘certain actions’ it
said Cowdery, Maidens and Newman had undertaken between October 2007 and May
2008 pertaining to Resolution plc’s takeover by Pearl. It did not disclose what
the actions were, but concluded the investigation this summer with no action
taken. Resolution’s acquisition of Friends was then cleared by the regulator.

Bourke has had some mud flung her way, too. Amid speculation over who might
take up Sandy Crombie’s seat at Standard Life, there were suggestions that she
had somehow failed to spot the “serious monitoring and record-keeping
inadequacies” the FSA fined St James’s Place £250,000 for in 2003, two months
after she a role as a consultant to company’s the chairman and CEO.

A £1.1m fine imposed by the regulator on AWD Chase De Vere in 2008 for
“serious failings in its pension transfer, pension annuity and income withdrawal
business that resulted in mis-selling” between February 2006 and October 2007
threatened her otherwise good reputation. Even though the time period in
question was two years after her departure, things like that can be damaging in
an age of heightened reputational risk.

You could argue that experience of managing trickier situations creates the
kind of vibrant leadership one would hope to see in a post-crunch environment.
Bourke’s record treads a lot of interesting ground, from her early professional
years at Bank of Ireland to the unpleasantness in winding a business up when
market forces turn against it – as they did for Nascent in 2002. “I went in as
the third or fourth employee [at a Bank of Ireland initiative] when it was
basically the CEO, myself and an application for a license for authorisation.
­Within two years, there was a company with 10% market share and 300 employees,”
she recalls. But in Nascent’s wind-down, Bourke found an opportunity to learn
some tough lessons. “It’s extremely revealing. It really asks a lot of people,
their commitment and willingness to see something through the nasty phase of
tidying up,” she reveals. “You realise there are all these things that crawl out
of the woodwork, which you feel if you’d known about upfront, you’d never have
left it happen -­ contracts which look fairly benign in a going concern
situation often have all these clauses which kick in and start to be critically
punitive in a wind-down situation. I think it’s a situation where character
really shows through.”

Of Standard Life Bank, under her remit when she was CFO of the UK financial
services business and recently sold to Barclays, she says: “A really nice
business, but it was a huge struggle to get the volumes needed to make it
deliver an acceptable return for shareholders. I think Standard Life has done
the right thing. ­ It’s a good exit.”

The CFO job remains her day-to-day responsibility among all the excitement
and the headlines. But talking about the relationship between herself and
Matthews,­ both actuaries,­ it’s clear that the lines between their roles are
very blurred – especially as someone of her experience would be wasted boxed
into the chief beancounter job.

“Trevor has a greater reach operationally than I would have and probably more
regular interaction with the sales guys and the folk driving different parts of
the business on a day-to-day basis.

Ultimately, he leads the strategy discussion at board level and I complement
him by being able to articulate the financial consequences. But both strategy
and the financial consequences of strategy are something we’re both very engaged
in,” she explains.

“It’s not a black and white separation. More of a continuum,” she quips. “Two
sides of the same coin.”

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