GSK To Name RBS's Hampton As Next Chairman

GlaxoSmithKline (GSK), Britain's biggest pharmaceuticals company, will this week name Sir Philip Hampton as its next chairman, just days after it was fined nearly £300m for bribery by Chinese authorities.

Sky News has learnt that GSK will announce the appointment of Sir Philip as chairman-designate before the weekend, triggering a separate statement from Royal Bank of Scotland (LSE: RBS.L - news) (RBS), where he has chaired the board since its taxpayer bailout in 2008.

Sir Philip, one of the UK's leading business figures, is expected to join GSK's board as a non-executive director around the turn of the year before taking over from Sir Christopher Gent sometime after the general election in May.

In a statement issued to Sky News on Wednesday, a GSK spokesman said:

“Succession planning for the chairman is well underway.”

The confirmation of Sky News' disclosure that Sir Philip was the leading candidate to replace Sir Christopher is likely to be welcomed by GSK investors, who are keen for the company's board to be strengthened with greater corporate experience.

A former finance director of BT, Sir Philip has also held the same role at British Gas and British Steel.

The process of recruiting a new chairman at GSK has been complicated by RBS's need to appoint a successor to Sir Philip, who is likely to want to know which party will form the next government given the state's majority stake in the bank.

Parachuted in alongside Stephen Hester shortly after the bank’s £45.5bn taxpayer rescue in early 2009, Sir Philip will mark his sixth anniversary at RBS next February.

He has said repeatedly that company chairmen should look to serve for between five and seven years, although colleagues say he is unlikely to leave RBS until his successor is in place.

Sky News revealed last month that RBS's board had hired Egon Zehnder International, a headhunter, to identify its next chairman/

The Government remains years away from a full privatisation of its majority stake in the bank, while RBS faces uncertainty from a UK competition inquiry and regulatory probes covering alleged manipulation in foreign exchange markets.

Nonetheless, Sir Philip’s in-tray at GSK could prove to be only slightly less challenging than the one with which he has been confronted during his RBS tenure.

One of his most important tasks at the drug-maker will be to identify a successor over the long term to Sir Andrew Witty, the chief executive, who apologised last week for GSK's misdemeanours in China.

The company's shares have also suffered, having warned on profits during the summer as the company seeks new blockbuster products to offset a decline in sales of Advair, its best-selling asthma medicine.

Mark Reilly, the former head of GSK's operations in China, was handed a three-year suspended jail term by Chinese prosecutors for bribing doctors to prescribe GSK products.

He will be deported back to the UK following his trial.