Growing number of UK chief executives are accountants or financiers

Research by Elisabeth Marx, headhunter at search firm Hanover Fox, found that 41% of CEOs at large UK companies have an accountancy or financial services background. When Marx undertook similar research in 1996, the figure was just 24%.

Marx says a growing proportion of CEOs are educated to degree level and have worked abroad. Investment bankers, who often benefit from superior education and international exposure, fit that profile.

Luqman Arnold, chief executive of Abbey National, the UK retail bank and mortgage provider, is an example of the new breed. The former president of UBS and former head of investment banking at Banque Paribas and Credit Suisse First Boston (CSFB), moved to Abbey National last October.

This year Elan, the Irish pharmaceutical company, appointed Kelly Martin of Merrill Lynch as chief executive. He was president of Merrill's international private client division and has a capital markets background.

Andrew Lowenthal, headhunter at search firm Egon Zehnder, says many investment bankers are keen to do something similar. He says: "A lot of high quality people working in investment banking are finding that when they get to 45 or 50, their most interesting next move is into the public sector or a corporate role. These will typically be less well paid but provide variety and challenge."

A move into corporate life is not always easy. Christopher Beale, a headhunter and chairman of the UK's Institute of Directors, says companies are often sceptical about bankers' operational abilities.

"After the excitement of a deal-driven role in investment banking, running a company can be a laborious procedure. It is a big leap and most conventional services and manufacturing companies would not consider an investment banker as their chief executive," he says.

Becoming a chief executive may be easier in the US. In July, the consumer finance group CIT made Jeffrey Peek, a vice-chairman of CSFB, its president and chief operating officer and described him as a possible future chief executive.

A spokeswoman says he has an extensive understanding of the capital markets and a strong network of contacts as well as outstanding management skills from working in investment banking.

Peter Gonye, a headhunter in New York for Spencer Stuart, says it is common for US investment bankers to become chief executives of corporates. Banking experience is seen as useful if the company wants to make acquisitions, or if it was gained in the sector in which the group operates.

In Europe, becoming a finance director has been more common. In July, the luxury goods group LVMH hired Jean-Jacques Guiony, a partner at Lazard in Paris, as chief financial officer. The finance directors of France Télécom and Thomson are former UBS bankers.

Martin Angle, operational managing director at Terra Firma Capital Partners, the private equity firm, says investment bankers bring plenty of attributes to finance positions: "Very few bankers move into corporate life, and more should do. Industry has a natural reluctance to hire from the City of London but a lot of companies are realising that the finance director needs to be a high-level thinker instead of a number-cruncher."

Angle was head of international corporate finance at Kleinwort Benson before leaving in 1997 to become finance director of TI Group, a FTSE-100 engineering company and former client. He joined Terra Firma in 2001. Angle says his background in the banking and corporate worlds made private equity the ideal place to be.

Post-Enron, however, the tide may have turned against investment bankers who want to be finance directors. James Hickman, a headhunter at search firm Russell Reynolds, says accountancy qualifications are now mandatory for CFO positions: "Large corporates can no longer afford to employ a CFO who is not fully qualified and entirely watertight."

However, few young corporate financiers have an accountancy background. Qualifications such as an MBA and CFA have replaced accountancy training as a path to an investment banking career.

Equally, the legacy of John Mayo, the SG Warburg banker who became finance director of Marconi, does little for the reputation of bankers in the corporate sector. Through numerous acquisitions, Mayo helped turn Marconi from a defence specialist into a telecoms group. It ran up huge debts and came close to collapse. Mayo resigned in 2001, shortly before he was due to be made chief executive.

A former banker says: "More bankers need to move into industry and be seen as successful. Mayo hasn't helped in that respect."

He says bankers are seen as too interested in dealmaking and personal compensation. To overcome this, it may be necessary to accept a lesser pay package.

Here at least, Arnold is not a trailblazer. His basic 675,000 (€961,000) salary at Abbey National is 70,000 higher than that of his predecessor.