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Former chancellor Alistair Darling says Sir Adrian Montague’s four decade career at the intersection of business and government makes him well equipped for his next mission: fix Britain’s largest water utility.
Montague, who was appointed chair of Thames Water this week, “understood how government works while also understanding the private sector, which is essential in these situations,” said Darling, who dealt with him in various roles when in government.
Peers and former colleagues say that Montague will need these skills as chair of the debt-laden water utility, whose chief executive Sarah Bentley abruptly quit on Tuesday, raising fresh questions about the company’s health and prompting government ministers to dust off potential nationalisation plans.
Thames Water, which has £16bn in debt, is facing rising interest payments and needs a cash injection from its shareholders. A year ago, the company announced plans to raise £1.5bn of equity from its institutional backers. But after 12 months it has raised £500mn.
Montague “is very good at managing across a whole range of stakeholders,” says City veteran Sir Gerry Grimstone, who has known Montague for more than 20 years. He described it as of “critical” importance for juggling the needs of water regulator Ofwat, the UK government and Thames Water’s commercial shareholders.
He was “respected across the whole spectrum”, Grimstone added, which will be useful because his new job at Thames Water “clearly requires a lot of balancing of various interests.”
A solicitor by training and for the first 20 years of so of his career, Montague’s path has included a stint as an investment banker in Dresdner Kleinwort in the 1990s, followed by a tour of duty at the Treasury from 1997 to 2000.
He went on to chair British Energy from 2002 to 2009, where he led a mammoth restructuring that culminated in its sale to France’s EDF, before chairing Anglian Water from 2010 to 2015.
Within the City, insurance became his later career calling, first as chair of Friends Provident from 2005 and later as chair of Aviva.
His term at Friends, which was taken over by Aviva, included ousting the chief executive in 2007 and rejecting a bid from private equity house JC Flowers in 2008.
“He has a huge capacity for work and for pressure,” says one banker who worked with him.
He has earned a reputation as being ruthless in his dealings with executives. As chair of insurance group Aviva from 2015 to 2020, Montague headed the board that pushed out Mark Wilson. The CEO had made decisions that irked shareholders, including taking a board seat at BlackRock, a rival to Aviva’s asset management arm.
More recently, colleagues saluted his ability to build consensus as head of City lobby group TheCityUK during the pandemic. “He was always very calm, very measured, refined, a sort of safe pair of hands,” said one member.
“He has a phenomenal contacts book,” says TheCityUK chief Miles Celic, who recalled that Montague would often interject with “I know that person . . . I worked with him, I’ll drop him an email” whenever needed.
That contacts books stretched across generations; one of Montague’s initiatives at Aviva was to set up the Evolution Council, a shadow-board of promising 20 and 30-year-olds charged with bringing a different perspective on issues that went before the main board.
Montague, an opera fan and collector of classic cars who is described by peers as “wily” but humorous, will step down as a chair of Manchester airport in September. But the 75 year old will remain chair of the UK’s largest gas distribution network Cadent Gas, and Porterbrook Holdings, which owns around a quarter of the UK’s national passenger trains.
Asked whether he would be able to dedicate enough time to Thames Water given his other commitments, a spokesperson for the company saluted his “range of experience and deep knowledge of infrastructure businesses and the utilities sector, particularly the water industry”.
Darling reckoned that the Thames Water situation looked “pretty difficult”. “But I think he’s big enough to do this, he knows what is doable, he will find a solution if a solution is possible.”