John McFarlane: ‘What do you do? You put a plant in that corner’

Midway through our conversation, John McFarlane rolls his desk chair to the left to reveal we’ve had company all along. Pinned to the wall behind him are three brass figures, whom he introduces as the “three wise men” of feng shui.

Through booms and crashes, the 73-year-old banker has over several decades worked for some of the biggest brands in finance on three continents. Until last year he was chairman of Barclays. Now he chairs Westpac, one of Australia’s big four. And through the bulk of his career he has been trailed by the trappings of this ancient Chinese philosophy.

“It’s all about money and long life, essentially,” he says, before spending a full 15 minutes extolling feng shui’s benefits. McFarlane seems convinced it has helped his record in business. “You know what? If somebody says, ‘Put a plant in that corner and your profits are going to go up,’ what do you do? You put a plant in that corner.”

At Barclays, however propitious the plants, the financier can hardly claim unadulterated success: in his four years as chairman, the share price slumped and a string of scandals dominated the news agenda.

But he has a winning trio of previous turnrounds (as executive director of Standard Chartered in Hong Kong, then chief executive of Australian bank ANZ and chairman of British insurer Aviva), a record that persuaded the board of Westpac, excoriated last year for facilitating money laundering on a vast scale, that it had a decent chance of recovery under the stewardship of McFarlane — and his three wise friends.

I had been due to meet John McFarlane for lunch on a couple of occasions after he left Barclays in May 2019. The first was cancelled: the bank had got wind of the idea and wasn’t keen for the famously chatty Scot to do a tell-all interview.

So we waited for some time to pass until he landed his new role at Australia’s number-two lender. His diary would bring him back to London in early March, he told me, and we fixed on his choice of a “nice and noisy” West End restaurant. A week beforehand, a travel ban by Westpac, ahead of Australia’s official coronavirus lockdown, thwarted this date, too.

But finally, with all the challenges of a nine-hour time difference and a sometimes shaky video link, we are finally sitting down for a Lunch-cum-Dinner with the FT. My meal is an early lunch (it’s 12 noon in London), his a late dinner (at 9pm in Melbourne).

We announce our food choices: for him, a mushroom risotto cooked by his wife, with a couple of local Australian red wines; for me, the best that the Waitrose and Pret A Manger outlets near the FT’s office can offer — a beetroot, feta and grain salad followed by macaroni cheese, and a half bottle of Chablis.

McFarlane is a man of many identities. Originally an industrialist (his first job was running an engine production line at Ford in Dagenham), he was then a banking sector revivalist (at Citibank, StanChart and ANZ), before becoming the hard-charging chairman, nicknamed “Mack the Knife” for his record of firing chief executives at Aviva and Barclays.

The last time I’d seen him was at his Barclays leaving party, held on the top floor of the bank’s Canary Wharf headquarters last summer, when he revealed yet another persona: he was, it turned out, a rather handy folk guitarist and singer. In an evening typical of this maverick financier, McFarlane charmed the room with renditions of Art Garfunkel’s “A Heart in New York” and Ralph McTell’s “Let Me Down Easy” (last line: “So hard to let go”).

So as he takes a first forkful of rice (“terrific, 10-out-of-10 risotto”) and I make do with a disappointingly bland serving of beetroot salad, I ask him to tell me more about his love of music. Aged 17, John played with a skiffle band called The Sekrets. A master of the humblebrag, McFarlane says they were “never serious”, though they did “some television and competitions and things” and supported the likes of Manfred Mann and The Hollies at live gigs.

I assume, given the leaving-do concert and the abortive music career (which he quit for the not-very-rock-‘n’-roll option of studying commerce at Edinburgh University) that he must be a passionate musician. Sure enough, he has 10 guitars in his Melbourne apartment, and another five at his holiday home in the south of France.

So he’s kept up playing as a hobby all these years? “No.” So he only plays, what, a couple of times a month? “No. Once or twice a year.” Cue the humblebrag: “It’s just like riding a bike. I just pick it up. If we have a dinner, people will say to me: ‘Would you play the guitar?’ But, otherwise, no. I keep them in tune, but I don’t play them. I can. I can play them, I just don’t.”

McFarlane’s boasts always come with a dose of charm. The same cannot be said of his CEO executions: the sacking of Antony Jenkins from Barclays in July 2015, within a few months of his arrival as chairman, and before that Andrew Moss from Aviva in May 2012, again just after his arrival, were famously brutal — and in both cases were criticised by some as impetuous and self-serving. No replacement was lined up at either group, with McFarlane himself taking over as executive chairman for months on end. Part of the reason was that he thought he knew better.

Having started at Ford in 1969, and worked through the 1974 three-day week, McFarlane was inspired by a colleague to go off to business school later that same year. “The MBA was not advanced in Britain in those days,” he recalls. “I applied to London, Cranfield and Manchester, which were the top three schools in the UK at the time. I got into all three.”

McFarlane digs into his risotto again, expressing guilt at the “little bit of Parmesan” he’s sprinkled on top of it, flouting his health drive. In recent years, he’s gradually turned vegetarian, followed diets and watched his weight. As a near life-long vegetarian myself, I congratulate him on joining the club and tuck into a tasty macaroni cheese with kale and cauliflower.

I ask him about his competitive spirit and whether it might have roots in his upbringing in Dumfries. He mentions his father, and the scholarship McFarlane senior won to a prestigious Catholic private school. “As the eldest in a working-class family, he was unable to pursue it: the family needed him to work.”

At Citi, McFarlane cultivated a reputation as a “troubleshooter”. He was sent around the world — to India, Australia, Brazil, Argentina — and was finally made boss of the group’s UK operations. But then he quit. “I took the view,” he says, “that the probability of my becoming very senior at Citi, being from the UK rather than the US, was not as high as if I worked for a British institution.”

Thus began a flirtation with Royal Bank of Scotland that could feasibly have seen the history of British banking take a very different course. It was 1998 and RBS’s then boss George Mathewson floated the idea of hiring McFarlane as deputy CEO. But he never followed through. And the man who got the job instead was Fred Goodwin. Infamously, Goodwin later took over as chief executive and expanded the bank so aggressively that it blew itself up in 2008, requiring a £46bn government bailout, the biggest in the world.

In 2006, Mathewson approached McFarlane again, this time to replace himself as chairman, though he ultimately chose Tom McKillop, the former AstraZeneca boss who was later blamed for failing to keep Goodwin in check.

So is McFarlane doubly to blame for the collapse of RBS, I jest. “Well, it’s not my fault in that they didn’t come through with a firm offer,” he says. “It could have been me, and I like to think perhaps that might have been better.”

Come 2008 and McFarlane did in fact join the RBS board as a non-executive director, just before the bailout, arguing forcefully for a rapid exit from the investment banking activities that had got the group into so much trouble. “I did speak to the [government] at the time and I said, ‘You’re doing the wrong thing,’ and they said, ‘Our advisers say you’re wrong.’ I said: ‘That’s easy, just get better advisers.’ ”

These are not the career highlights he wants to focus on, though. He steers the conversation towards the growth drive he pursued at StanChart and the explosive expansion at ANZ. “The market cap quadrupled, quintupled,” he says when remembering the share-price jump he oversaw at the Australian bank. “And it was in the Harvard Business School as a case study in cultural change.”

All of which brings us back to feng shui. As McFarlane concedes, strategic smarts can only take you so far. Getting the physical environment right is crucial, too. And suddenly he’s off: his normally low-key delivery shifts into top gear. Now the most animated I’ve seen him, McFarlane recounts how feng shui, and his decades-long adviser Patrick Wong (“he advises billionaires!”), have underpinned his business successes.

Wary at first, McFarlane was introduced to Wong by StanChart’s then chief executive Malcolm Williamson back in the early 1990s. “I had a big wooden sculpture in the corner of my office. And he said to me: ‘You can’t have that inside your office, you have to put it outside in the corridor.’” Wong held a tablet with a compass needle over the artwork to prove his point: “This compass just whirled. So I took the sculpture and put it outside.”

John McFarlane


Home-made mushroom risotto

2018 Australian Pinot Noir

2008 Australian Barossa Shiraz

Patrick Jenkins


Pret A Manger macaroni cheese, kale & cauli £4.75

Waitrose wheatberry salad £3.15

Waitrose mixed olive roll £0.50

Waitrose Louis Moreau Chablis £18.80

Total £27.20

Compared with what happened next, this was mild. Within weeks, having been dispatched to StanChart’s Hong Kong office, McFarlane, on Wong’s advice, was considering major structural alterations to the bank’s headquarters.

“He said to me, ‘Look, the building is being assaulted by the cannons,’ which were two gantries at HSBC [next door], and by the sharp corner of the triangular Bank of China building [beyond that]. We needed to defend ourselves.” One option would have been to change the building’s roofline. Happily, Wong had another solution. “He said: ‘What we’ll do is when the buildings attack us, we’ll just get the building to bounce back quickly.’ ”

And how do you do that, I ask, struggling to get a word into McFarlane’s eager narrative. “‘Well, you know Subbuteo, the footballers with the leg weights in their bottoms?’” Wong told him. “‘You knock them over and they bounce back. We’ll put a crystal ball in the centre of the building, in the basement of the building. And then when it gets attacked and knocked over, it just bounces back. If we do that, your profits will rocket.’

“Now, that was one of the reasons they rocketed,” McFarlane concludes. “The other reason was I gave it a good push.”

When McFarlane moved back to the UK, first sitting on the RBS board, then chairing Aviva and finally chairing Barclays, he kept up his feng shui, puzzling colleagues as he redesigned his office — and other parts of the Barclays HQ — to maximise the good omens. McFarlane felt the vast plinths declaring Barclays’ “values” in the lobby were very “negative”. “But we didn’t have to take them down. All we did was tied a red ribbon around the bottom. Which is a substitute for fire.”

Did chief executive Jenkins know that his chairman was burning down his values? “No, he didn’t, no.”

But the magic deserted McFarlane at Barclays. The run of success racked up in previous jobs proved impossible to replicate given the multiple challenges faced by a bank whose debt-fuelled investment banking expansion before the 2008 crisis had been wildly successful, but which was now struggling with an identity crisis. Amid tougher regulation, a whopping fine from the US Department of Justice and the increasing dominance of US competitors, the bank’s share price, which McFarlane had said in a well-flagged 2015 declaration should be doubled, very nearly halved during his tenure.

It is a metric that obviously bothers McFarlane. For years he prided himself on working at winners. Barclays, he admits, “wasn’t as successful. We were pushing uphill.”

Our time is running short. If we were in a restaurant, we’d be ordering desserts and espressos by now. As it is, we’re making do with a final slug of wine. His second glass, after a disappointing 2018 Pinot Noir, is a fine 2008 Barossa Shiraz.

I can’t let McFarlane go to bed (it is past 11pm in Melbourne) before quizzing him on the biggest story of his time at Barclays — the way that Jes Staley, the former JPMorgan banker who was his choice as chief executive (and is still the CEO today), dealt with a controversial whistleblowing incident. UK regulators fined Staley £640,000 for twice trying to uncover the identity of an anonymous whistleblower who had alerted the bank to the misdemeanours of a new hire.

Why didn’t Mack the Knife fire Staley? It was, McFarlane still maintains, a “perfectly innocent mistake”. Staley’s error, says McFarlane, was that he “sent a text to the head of compliance who then followed it up and tried to identify the whistleblower in the US”. Staley survived, albeit without a chunk of his pay package.

It is too early in McFarlane’s tenure at Westpac to know how successfully the bank will bounce back from either its own misdemeanours or the economic shock that Australia and the rest of the world are experiencing. But if the veteran banker was guilty of over-optimism when predicting the fortunes of Barclays five years ago, he is striking a cautious note now.

“I don’t think it’s a V-recovery,” he says. “An elongated U is perfectly possible. I’m a conservative. I plan for the worst and hope for better. I think [recovery might come in] 2022 or 2023, but I don’t think it’s 2021.”

And what about Hong Kong, his one-time home, which is now in the midst of a potentially seismic shift of power away from democratic semi-autonomy from China towards all-out rule from Beijing? He puts the blame on the “protests and related disturbances”, rather than political and legislative change, and predicts that Shanghai, Singapore and even Sydney will benefit — at least temporarily. “It cannot be a full-flight international centre until stability returns.”

On the spur of the moment, I remember McFarlane’s comment about dinner guests asking him for a tune, and wonder if I can persuade him to dust off a guitar and play us out. “Oh, OK,” he mutters, and I’m treated to a charming rendition of Bob Dylan’s “Don’t Think Twice, It’s All Right.” And with that, John McFarlane takes a final swig of his Barossa Shiraz and presses “close”.

Patrick Jenkins is deputy editor of the Financial Times

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