City & Corporate: A bad image can kill off a good CEO

It is normal in the City for executives to get sacked when they fail to deliver growth. It is less usual for them to suffer the same fate when they have performed. But the bitter experience of former Prudential chief executive Jonathan Bloomer shows it does happen.

However you slice it, the latest results from Prudential, and those on which Bloomer deserved to be judged, were good. The main ingredients of Bloomer's strategy seemed to be correct - Prudential was well positioned in the growth markets, it had the capital to finance its expansion and the management to execute its plans.

But the City did not like Bloomer, alleging that too many past initiatives had failed. The reality is different. He collected a massive break fee in the US, rather than get into an auction and overpay, and he refused to sell Egg for less than the board considered it was worth - funny kinds of failure.

What Bloomer had was a PR problem, and he came to be perceived as accident-prone. It became fashionable for analysts, and those sections of the press gullible enough to listen to analysts, to belittle and dismiss him as a liability. Thus his failures were magnified and his achievements diminished.

The perception gradually came to take on greater significance than the reality, and this gradually got to the board, who pulled the plug on him.

Bloomer is not the first to suffer this way. Bob Ayling never got credit for his achievements at British Airways, and it is probably no coincidence that Ayling, like Bloomer, was reserved, cerebral and never appeared comfortable dealing with press and investors. He never got credit for his big decision - changing the aircraft type to serve a different kind of route structure - but was forever tainted by the cabin-staff strike. He was sacked because perception triumphed over reality.

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