Sir Philip will join the GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK) board as a non-executive director in January, before becoming deputy chairman on April 1 2015 and ultimately replacing Sir Christopher Gent as chairman later in the year.
The move represents a switch between two of the most challenging posts in British business. After joining Royal Bank of Scotland Group plc (ADR) (NYSE:RBS) (LON:RBS) at the height of the financial crisis in 2009, Sir Philip will be tasked with improving the future prospects of GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK), which has just been fined almost £300 million by Chinese authorities for bribery, as well releasing a profits warning just two months ago.
A problematic succession
The departure of Sir Philip had been expected, but matters have been complicated by the fact that the bank is 81% owned by the UK government. The search for a successor will presumably increase in intensity following next May’s general election.
A source close to the affair claimed that “the government has put £46 billion into this company so it is bound to take a deep interest in the make-up of its senior management.” It is thought that Sir Philip will also want to know which party will form the next government before appointing a successor.
Rebuilding GlaxoSmithKline’s reputations
The bribery scandal of the past year has severely affected GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK)’s operations in China, one of the fastest growing pharmaceutical markets in the world.
Mark Reilly, the former head of GSK’s operations in China, has been given a three-year suspended jail sentence by a Chinese court for bribing doctors to prescribe GSK products. Reilly is to be deported to the UK upon the completion of his trial.
Additionally, shares in GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK) have suffered an 11% decrease in the past year, in contrast with a 14% rise in the pharmaceuticals sector as a whole. One of Sir Philip’s main tasks will be to offset the decline in best-selling asthma drug Advair with new sources of growth.
Although Sir Philip trained as a chartered accountant and has no experience in the field of life sciences, a source claimed that he is a top candidate for the job because of his time in the “highly regulated, high-risk” financial sector.