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What is wrong with the UK retail CEO role at Gallagher?


Stuart Reid was the fifth UK retail CEO to depart A J Gallagher in as many years. So what is it about the role that causes such a short tenure?

The position has been filled by Michael Rea following Stuart Reid's departure. Rea will split his duties between UK retail CEO and his existing position of chief operating officer.

"They've realised that they've just got too many chiefs," said a source close to Gallagher. "That's part of the reason for getting rid of Stuart. The way it's structured, you have the UK retail business reporting to the international executives, who then report to the CEO, who then reports to America."

The majority of the responsibilities of the role have now been subsumed into the responsibilities of Michael Rea, chief operating officer for the firm's International Brokerage Division.

Gallagher will recruit a senior operations director to take over some of the operational tasks of Rea.

"With Michael Rea as the international executive, who is a safe pair of hands, they've thought ‘what's the point of paying this big sum of money to Stuart to basically act as a middle manager'," said the source.

"So they've realised that they have too many layers, and getting rid of Stuart is a part of stripping that down to make it a simpler business to run.

"In a nutshell, that probably explains the turnover in the job. They don't want someone with an opinion, they want someone to do what America wants."

A spokeswoman for Gallagher told Post that no layers had been removed from the management structure as per the source's suggestion. 

Reid joined Gallagher in October 2015 having left Bluefin in April of the same year.

He joined the role previously occupied by Janice Deakin, Peter Blanc, Brendan McManus and Adrian Colosso, since 2011.

Post understands that the decision for Reid to leave was mutual and that the decision was spurred by frustrations over how long it had taken for Reid to become Financial Conduct Authority approved.

"The UK management all the way up to David Ross weren't allowed to make fundamental changes. So it's probably a good job for someone that's happy to be a middle manager, and not a CEO," the source said.

"When you look at past CEOs like Peter Blanc, Brendan McManus or Adrian Colosso, they run their own businesses. They are completely in charge; it's very difficult to go from that to a situation where you're not really in charge.

"They were putting proper bosses into a job for middle managers. Their definition of CEO is different from the real one."

Former UK retail CEO Brendan McManus told Post however that the source's assessment of the role was not accurate.

"I left AJG after the sale of Giles because I had some things I wanted to achieve that I couldn't as part of a public company," McManus told Post.

"The level of autonomy for managers would have been about the same as any other international public company. I discussed the reasons I wanted to move on with them, and the AJG management were very gracious about it."

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