Lawrie: My guest in the Leadership listening podcast today is Keith Meekins, whom I’ve known for about five years. And I think that Keith’s story is one that genuinely comes under the heading inspiring because he made it from the ground floor of the financial services industry to become chief executive of Daiwa Capital Markets Europe, which is a significant investment bank.

Keith recently retired and is now able to give the Leadership listening podcast a bird’s eye view and real insights into what I might describe as the slightly opaque world of investment banking. So welcome Keith, let’s hear a little bit about your early life, family, school, and what happened in that era.

Keith: Well first of all, Lawrie, thank you very much indeed for inviting me to participate in your, your podcast today. I think we’ve been trying to do this for about six or or 12 months. We’ve had various issues and today I thought maybe Storm Benjamin was gonna cause a problem for me. because I sit very much on the white cliff of Dover here in the south of England very close to Deal.

It’s four years since I retired. I did 40 years in investment banking, splits over four different companies. My father sadly isn’t with us anymore, but he was a great inspiration for me. But he wasn’t involved in the financial markets. Actually. He was a chartered surveyor.

He worked for Sir Robert Mc Alpine. But, again, maybe a little bit of what influenced my career where I didn’t chop and change from a lot of different banks he actually worked for Sir Robert Mc Alpine pretty much all his life and and know achieved great things there. My mother is a great woman, very strong lady.

Looked after my father very well, but, only ever really sad as a housewife, apart from the odd occasion where she used to mark some exam papers. I don’t quite know the ins and outs of that, but I think that was relatively straightforward. My education, I was very fortunate to have a private education at a school just outside Tonbridge in Kent.

That was a great experience for me. And, one, I was very grateful to my parents because realistically, on face value know financially my parents probably couldn’t really afford for me to go there. So, they actually sacrificed quite a lot to send me there. But I think from my very early days,

I was always very keen on making money, very early. My father, rather than buying me sort of like the regular footballer or goal net, he used to buy me shares because I wanted to buy shares and I used to love watching them when he, when he came home with the evening standard. And I had an interest in making money from a very early age.

And the first opportunity I could work, which was on a paper round at 13 years of age I did that. And what was great about the paper round is I was doing the farm round, which gave you a little bit more money. The farmer had sold off his land and they started to build a golf course there. And I was thinking, how can I make some money outta this?

So quite soon I realized there’s a lot of people putting golf balls in lakes. So very early in the morning, halfway on my paper and I’ll jump in the lakes and take a few golf balls and then sell them the later day. So now I was very interested. No money was. Was a driving factor for me. I wasn’t really trying to achieve in buying anything.

I just like to see the bank balance grow a little bit. And we’re talking about pennies and pounds here. We’re not talking about anything that significant.

Lawrie: And numbers was always, numbers was always an attraction for you, mathematics and numbers more generally?

Keith: Yeah. It was, I always struggled a little bit with the likes of algebra and things like that.

Maybe that’s why I would probably struggle with writing anything regarding IT, but sort of business calculations. And I always had this ability to be able to calculate things pretty quickly.  I always felt that even though the relatively young age, you know, just reading in the press, I would sort of read something and then quite often see how that would influence a particular share price.

So with all this sort of being sort of mentioned, I guess I never really. Thought about going to university.  Now I saw sort of university as a bit of a delay for me to go out and actually make some money. So, what I did need to do though is to get some exposure to the likes of law, likes of accountancy, economics.

So I decided to,  when I finished school after taking just O levels, not A levels, just O levels, I decided to go to West Ken College and take the BTech course, which was a two year course, which a lot of people would be quite familiar with, which it gave me exposure to those areas of the world and those areas, potentially the market.

So now that was a great leave for me and after that two years, I didn’t have anyone to leverage off other than the fact I had to get on a train, go up to London. And try and get the job that I always wanted, which ultimately I was very lucky to get.

Lawrie: So you could see at that very early stage, Keith, the kind of trajectory that you wanted to follow, you know, what were you seeing at that time and how was it presenting itself to you?

Keith: Very differently then to what it is now. now I certainly wouldn’t wanna be an 18 or 20-year-old, guy with the ambition that I had wanting to try and get into, you know, the financial markets. it’s not an easy place and the world is changing. Technology is overtaking a lot of positions that, you know, were available to me  and I actually went to an agency who specialized within the investment banking world. Who put me, ironically, I dunno quite how the second job came along, but they put me in contact with Swiss Bank for an interview.

and on the same day they gave me another interview for IMS, which was the International Military Service which was selling weapons to the Arabs ultimately, I think but that was a civil servant role, which I didn’t take I went to Swiss Bank. They offered me after two or three interviews on the same day, the following day, they offered me a role.

and that role was to start in the settlements area, which was settling all the transactions of all the traders which was very much sort of, as you sort of said a very sort of like low level role, but an opportunity for me to get my foot in the door. We must remember when I talk about settlements as well.

It was a very manual process. Here now we working for Swiss Bank or actually SBCI, Swiss Bank Core International, which was a new subsidiary of of Swiss Bank, the investment arm at the time It was a very manual process when you were dealing transactions and settling them to the extent where every trade was put in manually, either into a Euroclear system or Cedel system or the German Cassian system.

and each time you put a transaction in, it would probably take you, depending on how quickly you were typing. No one to two minutes to do. I know we’ve had conversations about one of your sons, I think involved in the business and we’re talking about now millions of transactions taking place.

Not only after you put a transaction into a clearing system, but then you had to write it in a great big ledger manually so you could calculate on behalf of the trader what the trader’s positions were. What I found out quite early on was that traders were only interesting at buying at price A and selling it at price B, and as long as price B was higher than price A, they were happy, but they were never thinking about the consequence of like, cost of carry, no doing a free of payment trade where their money was.

Lawrie: Can you explain cost of carry, Keith? That’s an unusual expression for most people listening.

Keith: Yeah, I suppose, In terms of cost to carry it is what it is, what it says really is it is the cost of carrying a trade. Now it’s the same as, you know, if you take money outta a building society to go and buy a car, there is a cost to carry.

If you buying that car, you no longer get interest on your money in the bank. So straight away there’s a cost of carrying the infantry that you go and buy. So in layman’s terms, you are buying a bond and you’ve gotta pay for that there. Can be various scenarios. It could be free of payment.

Sometimes you would get the bond before you had paid for. It wouldn’t happen in this world because people wouldn’t trust people as much as that, that would be deemed as sort of free of payment transaction. But there was lots of different ways that I saw how a trader could make more money or save money rather, and make money by making sure he understood where the bonds were being held.

Were they being held in Euroclear? Were they being held in Cedel, which were the two big clearing platforms? Or were they over in Germany? If it was a German bond sitting in Cassen Bryan. because you can go from Cassen Bryan to Cedel, or Cassen Bryan Euroclear, but there’s a, there’s a timeframe to do that, you know, in this day and age.

It will be seconds with a press of a button then it would be at best a day at worst could be three to seven days, depending what you’re doing. And of course you can throw in the weekend on top of that. So quite soon I was seeing that people no traders, were having a lot of money or a lot of positions sitting in a particular area and they weren’t utilizing that money or utilizing the financial side of that money.

And so what I used to do is I used to put that money on deposit for them. Come a weekend, put that money, transfer the money maybe from Euroclear or Cedel to Germany because they’re gonna have to buy some bonds or pay for some bonds over there. And quite soon a lot of traders realized that their performance was enhanced quite substantially just by what I was doing in the background.

Now I showed quite early on a interest to want to be a trader, and the smart traders at that stage realized that if they got me on their books and did all this financing for them that the spinoff to me would, that they would teach me a little bit about trading. And there was a guy, a Swiss German guy called Hans Bloom.

I don’t really know where he, where he is, but a real character took me on board to start trading Euro Deutsche Marks. Now, when I say trading, that’s a bit glamorous really in the early stages, because I used to go up at around six 30 in the morning. I’d be sitting on the desk in London. Bearing in mind I was coming in from Kent.

So I was getting up at about 04:30 04:45 every day to get in that time. And I would do from 06:30 to 08:30 on the desk, learning the ropes from a training perspective. And then when I finished my role at five o’clock in the evening, I’d then go back on the desk and sit there anywhere from sort of seven o’clock, sometimes eight o’clock, sometimes nine o’clock in the evening.

So now I was putting in a, a significant shift I think is expression that’s used these days and I think that you know people very early saw that I had an aptitude for numbers but more than anything I had an aptitude to learn and I wasn’t prepared just to take a no for it. So

Very soon, especially in that time, we’re talking about the early eighties here, 1983, I would’ve thought. 1984. Now, the bond markets were really just evolving at that stage they had been around for a little bit, but in terms of the speed that they were progressing and the way more and more companies were getting involved to finance some of their debt and also governments financing their own debt as well,  it was becoming an expanding expanding business.

And I guess, again, to coin a phrase, I was able to catch that wave and, and surf that for quite a long time. And what that meant was that there was a lot of opportunities, far more than there are now for you to rapidly get given responsibility sometimes probably too early actually but given some rapid responsibility very quickly.

that sort of gave you the opportunity then to become. Quite a hot commodity because you’ve got all these other banks in the background that are trying to do the same thing. And Swiss Bank was one of the earlier ones to get involved in the bond markets and the issuance and everything else.

So after doing Euro Deutsche Mark, I got put onto the government trading desk, which basically was trading government debts with a gentleman called Nigel Farmer, who I guess he was a real inspiration to me great character and he after only six months of teaching me I got I got a knock on the door from him and he had told me that he was leaving and he was gonna be moving to Nomura.

this was only after me sitting on the desk for six or 12 months and he turned around and said, Keith, I’d like to come along. The way I thought in those days was, well, hold on a moment. If you are going, that means there’s a gap there. So why do I want to leave the bank and go with you when I can now try and put my hand up and maybe get your position not to such a senior level?

But there was a lot of money around those days. You know, you’re talking about the golden handshake, the golden hello and all this sort of thing as well. So it was quite easily to be influenced by money which I was to a certain extent, I think, as any youngster. But I also saw and appreciated the opportunity that Swiss Bank had given me.

So I didn’t go with him for the first 12 months and I learned a lot in that 12 month period sitting on the desk at Swiss Bank. But he kept knocking on my door. So ultimately in 1987 I left Swiss Bank after five or six years and went to set up the trading desk at Nomura. And I guess now that’s where my affinity with the Japanese and the Japanese banking system and the Japanese culture originated from and really sort of saw me pretty much throughout my career until 2021 when I retired.

Lawrie: And so when you made that move in the direction of your first Japanese bank, what were the things that occurred to you as being significantly different about the Japanese culture and working in that environment?

Keith: Yeah, that’s a question that I could spend a lot of time answering. I think really I guess a bit naively when I sort of first took it, I wasn’t sort of. Thinking too much about whether it was a Japanese company or not. It was just, I guess, the opportunity of being involved in starting something new because they didn’t have a government trading operation or really much of a Euro on trading operation at that stage.

So to be part of that early on was something which I found very attractive and, and I was bringing a limited amount of experience. But again, I was able to draw a lot of my experience of when I worked on the, the settlement side of the business, of how now I could benefit the traders again, in the same way I helped the, the, the traders at Swiss Bank.

I think a lot of the challenges I subsequently faced working at a Japanese bank, I didn’t really fully understand when I first went there. Culturally they are very different. They’re not particularly receptive to change now that takes quite a long time, but I think the most challenging aspect of it was that they go through what is sort of like a rotation process where someone will only ever sit in their role for generally a maximum of three years.

And then after three years they’ll be rotated round and put in a different position. Now, you or I would perhaps move someone from trading French government debts. We may put them on the gilt desk trading UK Gilts, for example. Or you may put them on the US Treasury desk trading US treasuries the Japanese don’t do that.

My new head of Japanese government trading, who came from Tokyo, was the senior guy in the library. Now, what does that mean to us? Well that guy would sit and he would get pretty much every newspaper that was available out there in Japan and also in lots of the key countries in the world.

And if anything was ever mentioned about Nomura as a company, he was taken responsible to take it out, cut and paste it slightly different to cut and paste than what we understand now, and then distribute that to all the senior bankers in the mirror and making sure that they were kept in touch with what was being said about their company in the media.

Lawrie: Mm-hmm.

Keith: and then three years after him doing that, he gets to knock on the door and he gets told by HR that he is now gonna be moving to London. He is gonna be changing Japanese government bonds. Now, I’ll touch on this point a little bit later on because it’s quite relevant to know, part of my role of how I became how I became CEO.

But that was a significant eyeopener for me. And the big challenge as well is for those individuals, they don’t, the Japanese, they don’t wanna make a mistake over that three year period. because if they make a mistake in that three year period, then it’s pretty much the end of their career and they just sort of go sideline.

So what is the best thing to do if you don’t wanna make a mistake? Well, don’t make too many big decisions. So to try and get a Japanese manager or someone in these new roles to make a decision and push the business forward. Was a real challenge and that was, again, a real eye opener for me. And you know you needed to get the Japanese on board because it was Japanese money you were using and it was a Japanese company, but to get them to make some of the decisions was a real challenge.

Lawrie: So that was SBC and then Nomura and presumably at some next stage, Daiwa began to come into view.

Keith: Yeah there was Commerce bank actually in between that for three years. Which was the one time I could, I guess, honestly say I sort of got headhunted , a little bit of a move for money.

But there was a really interesting story that they sold to me was that at the time, this is going back around early 2000, 2002, 2003. There was a lot of talk about the German banks taking back their trading from London. You may remember this from London back to Frankfurt and the French were talking about doing the same as well.

I was actually employed to, specifically, do the total opposite. So under the radar, I was employed to bring all the training operations from Frankfurt to London. So totally the opposite to what all the press were sort of talking about and that quite appealed to me. That sort of contrary role.

Lawrie: it was subterfuge Keith, I guess?

Keith: Yeah. To a certain extent. But, it gave me an opportunity to draw on a lot of my experience that I had gained from when I was at the mirror because weird set up an operation there, or I was being asked to set up or transfer, not so much set up, but transfer an operation, which was in Frankfurt.

But again, you’ve got the challenge of bringing people, German people from from Frankfurt into London. A lot of them didn’t want to do that we were having to make sure we kept all the key governments in the background in Europe in touch with what we were doing so we were having to inform the Bundes bank ahead of the game, what we were planning to do.

We were also issuing debt on behalf of the the French government. So we were having to inform them the Americans didn’t really care too much. Bank of England, we obviously had to keep in touch with. The one person we didn’t really have to keep in touch with too much at that stage was the regulator because they weren’t as prominent then as they were towards the back end of my career and towards certainly the markets as they are now. So I did three years at Commerce Bank, which was a really interesting time. And within that time, what we did was we also developed an electronic trading platform.

Now, through that era, we were seeing the life market. I think, hope, most people are familiar with the Financial Futures Exchange. London International Financial Futures Exchange Life Market which was the multicolored jackets with the people doing the tic tacking as you would see maybe at a race course.

Lawrie: Oh, I think it was called Open Outcry, wasn’t it, Keith? Is that the,

Keith: well, yeah. We just used to call it the Futures market, but it was an open outcry. It was a, it was a large room you weren’t sitting in your own offices. Everyone was sitting in the pits as they used to call it, or standing in the pit and people would be taking orders on the phone. You’d have locals who were people working for themselves actively trading their own money in these products as well and, this was sort of the start of the electronic era, because that was quite a manipulative market. You know, it was quite easy to go in and influence people by saying you wanna buy something, when in fact you weren’t really a buyer, you were a seller.

So they wanted to sort of change that from an open outcry market to an electronic market. So you started to see that market shift and you also saw a similar thing happening in the government markets. So government debt started to be issued or traded on electronic platforms. And the Italian market, actually they were called, I can’t remember what the abbreviation, well, the abbreviation was BTP, but it was the the Italian debt market was one of the early markets to go electronic, surprisingly because they were probably one of the least forward in terms of governments who are actively trading that market. And we developed at Commerce Bank, an electronic trading platform. Which enabled to bring all these platforms in together onto one unit, enabled you to see all the pricing, enabled you to trade at a flick of a button within milliseconds.

So we were sort of running this platform quite parallel to what was happening within the life market and I guess to cut a long story short Daiwa heard about this platform and I went and gave a presentation to them because I thought that we might be able to sell it to them or partially sell it to them.

And while I was there, they didn’t want me to sell it. They wanted to buy me, which was rather nice. So they offered me, through various conversations, I’m sort of half going there thinking, I’m talking about trying to sell this new electronic platform we’ve developed with other people. And then they’re asking to see me for meetings afterwards and then they’re offering me jobs to set up a similar thing in Daiwa but also to set up their or take over their training operation, which is what I did.

So I went in there not even as head of fixed income, which is what I was doing at Commerce Bank, but I just went in as head of trading to Daiwa.

Lawrie: So while you were in this sort of trading environment, were there signs showing through about leadership and wanting to grow that dimension, which obviously came through later on when you became chief executive?

Keith: Yeah. Some people call it leadership, maybe some people will call it bossy my mom always used to say I was a little bit bossy, but I always had a an aptitude for having a listening ear. I would always give people time to, you know, give their points of view and I like to communicate, I like to encourage and I like to you know, talk about different ways of doing things and different ideas, and I guess over time, sort of people get like comfortable and confident in, as you are as a person.

So when it sort of came to sort of making some. Bigger decisions like the electronic trading platform or you know, moving from one company to another. Because when I moved quite often I would take, you know, three or four of my top traders with me as well. Now they had to feel quite comfortable with me with what I was offering them because you know this is their livelihood, their family, then everything else. And no, they’re taking a decision on and you know I think the way I handled myself, people had confidence in what I was doing. So when you are trading, you know, the one thing you need to do is you need to be pretty frank and honest, but you also gotta be, you know, pretty patient because people aren’t gonna trade and lose money intentionally.

And they are gonna get someone that isn’t as good a trader. And you’ve gotta manage that situation. You’re gonna have a really good trader who then wants the world and wants to be paid more money. And you’ve gotta sort of manage so many different emotions in that. And I think I did have quite an early stage, an aptitude to recognize how to handle some of those emotions. What I didn’t know at that stage was really how to handle some of the emotions from a Japanese perspective, because, you know, we were starting to see more and more Japanese coming over from Tokyo into our operation in London. Which was a subsidiary.

Daiwa was a, a subsidiary. It had At the time when I joined, probably around just short of a billion dollars worth of capital. So we were very much on the radar from a regulatory point of view. Now you can leverage off that sort of number quite substantially and you can do quite a lot of damage if you don’t get it right.

So it’s yeah, it was a real challenge. And of course you throw in the mix of this rotation where you then get given people you weren’t expecting to get given because no, they want someone in Tokyo to learn government trading over the next two years. So you receive this guy who was quite senior before in Tokyo, and so he thinks he’s running the shop and I think that I’m in control and you’re having to manage all those dynamics.

So yeah, a lot of those, those challenges happen quite quickly but I seem to have a bit of a knack of managing it without it sort of becoming too much of an issue and becoming a cultural issue or political issue or just a person to person issue

Lawrie: To move away from any kind of modesty Keith, I think you were a pretty hot trader one way and another, and in the sort of, as I understand it, the sort of white knuckle area of trading, which is, you know, government debt, government bonds.

Keith: Yeah. I think it’s very, very kind of you to say that. I didn’t pay you any money to say that, by the way, but , yeah, it was, yeah, I suppose in a way I sort of threw myself into the deep end, but again there was an element of luck for me on this because now when I was at when I was at, at Nomura, we started to see some of what we called the emerging European markets develop within that umbrella, I would put Portugal, I put Italy, Spain, Greece at a later stage and these were markets where yields were very different. Now, the Italian debts was probably trading around 15% at that time versus Germany so one and a half thousand basis points, which is a significant amount of money. Bear in mind, we used to deal in fractions of a basis point in the government market.

, and I saw a lot of opportunity in the likes of the Spanish and Italian markets. So I ended up becoming a bit of a specialist in those so I sort of realized, I sort of thrown myself in the bit of the deep end to a certain extent, but it was probably one of the best decisions I made in my career because the Italian book in the mirror became one of the most profitable books there, not just on my side of the business, but sort of on the swap side of the business, which was, you know, another interest rate , instrent that people would trade.

So, yeah, it’s kind of to say that I was a decent trader. I knew how to manage risk. Now, a lot of younger guys didn’t understand it. You know, they saw this opportunity, if we can make, you know, decent money for the bank, we’re gonna get paid a proportion of that number and let’s sort of throw the dice to a certain extent.

My ethos was different to that. Now I was much more patient I wanted to build a business. I wanted to understand the business, and as I did that, I got more and more confidence from the likes of Nomura and Commerce Bank and then ultimately Daiwa or to develop businesses that weren’t so developed at the time but ultimately became, you know, very, very successful.

So yeah, the Italian in futures market, for example, which we talked about earlier on, the open outcry market, was probably the most brutal it wasn’t quite as bad as the Chicago border trade in terms of some of the key, you know, 10 year notes they were trading out there. But no, certainly right up there as a volatile market.

A lot of a lot of pressure. But when I look back on it, a very, very enjoyable time and it was quite. weird because I’m sitting right in the middle of everything that’s going on from trading at at at Daiwa and then out the blue I got called in by HR and I’m thinking, what have I done here?

and they turned around and said to me that they wanted me to become head of fixed income. So after building in the middle of building this business, I’m now sort of being given this opportunity, which is a fantastic opportunity to be given, but I’m now thinking, well, hold on a moment. If I do that, run fixed income I can’t just focus just on one particular area.

Now I’ve gotta focus on the credit markets. So I’ve gotta focus on the gilt market where we were a primary dealer at the time in gilts at Daiwa. So you know there was lots of changes in terms of my responsibility, but again he nature I have I just sort of saw this as an opportunity to expand my knowledge.

So I took that role on which I think caused a few ripples because there was probably one or two other traders that have been on the credit side that have been at the company for some time that would’ve been, know equally good at the job and perhaps should’ve been given a, a fair shot.

But I think maybe coming from the outside and also at this stage, starting to develop some good relationships with the Japanese and starting to understand the ethos of how a Japanese thinks and how he works. That now I was enabled to embrace that and help develop the relationships between London and Tokyo and within all this in the background, we’ve now got the regulator coming in a bit more. The FSA are now starting to monitor all banks much more closely. Obviously, we’ve seen the Bear Stones and Lehman’s issues Northern Rock, you know, all these sort of scenarios sort of frighten the regulator quite a lot so the one thing they’ve become is much more heavy-handed in terms of how to monitor you.

Lawrie: The message I’m getting, Keith, is rightfully the right message, that there were some very hard yards in the trading environment as you went through your career, but ultimately there was a much hotter seat waiting for you.

And I’m interested in that transition then from the trading environment towards becoming the chief executive

Keith: That that was. Probably one of the most interesting periods of my career in terms of in terms of change certainly. So I’ve already gone through the, going from head of trading to running fixed income and I was sitting in the seat of running fixed income for I think maybe a year, year and a half and then I’ve got another knock on the door from HR and bearing in mind human resources in a Japanese company is a very powerful position. It’s one of the most powerful seats that you can be given, certainly out in Japan.

Lawrie: I was gonna say, Keith, it’s a little bit unusual, isn’t it?

Certainly from a European perspective or from a best practice perspective, that it’s HR who knock on the door and not. The chief executive or a board member, for example?

Keith: Yeah. Well I guess the first point on that is we actually didn’t have a chief executive, I’ll come onto that point in a minute. But again, it’s because of the seniority of someone in Japan when people are making big decisions, it will be a senior manager will go into HR in Tokyo and they will discuss what they want to do, and then it will be the HR area through confidentiality and seniority who will then deliver that message.

So you are absolutely right. That wouldn’t be a normal way of doing it here in the UK or in Europe, but that process was reflected a little bit in our London office because inherently we were, no a Japanese bank, but, but sitting in London so yeah, it is quite unusual. It is quite unusual process.

But going back to the sort of point out of the blue, again, a knock on the door and I’m again thinking, what have I done wrong? because you’re always sort of thinking when it is outta the blue, and I’m told that there’s been discussions with the UK regulator and I’ve been involved in some of those on the periphery to a certain extent, but I wasn’t aware of this particular point.

And we’ve talked about this rotation that happens in Japan. It also happens to a certain extent in London. And we were getting the chairman coming from Hong Kong. Who had no knowledge really of the UK market, no knowledge of the UK regulator and he was being asked to sort of sit in this most senior role in a subsidiary in London with a limited amount of experience.

And the regulator started to get upset with this sort of parachuting of senior people. And it wasn’t the individual’s fault. They had probably done a great job overseas, outside of Japan, in Hong Kong or Singapore. And sort of like as a thank you, well go to London for three years. You can entertain clients, you can go and play golf and, and no, it’s not too much of a tough role because it’ll be all the local guide in which will which will manage the business but that wasn’t how the regulator wanted it. And when they started to interview people, when they came into these senior roles, they realized that there was quite a big gap in terms of experience.

So through the Japanese regulator into Japan and Japanese HR and through the UK regulator, the FSA, into our HR and our board at the time which we then have a chair, a joint sort of mixed chair. We had a Japanese chairman and the UK chairman the regulator came in and said that they no longer wanted to see a Japanese individual being put in that position unless he was fully qualified to do it.

And to be fully qualified, you needed to be sitting in London at least probably three to five years before you could get in that seat. So the regulator said they wanted a local CEO, we only had at that time a chairman stroke, CEO. So it was really a it was just a letter rather an actual role. And I think there were six people which were put forward to that position.

, and I can quite honestly say I was certainly the least qualified bearing in mind, I’m being put in this sort of meeting now with the regulator. I’ve never sat in a board meeting in my life. I was running fixed income. I may have gone and presented to the board just as a guest, but I certainly haven’t sat through the throes of a board meeting and probably didn’t really understand what the full responsibilities of the board was.

And of course, the other challenge was we didn’t have a role as CEO. So whoever got given this role of A CEO was gonna have to develop it. So. I’m thinking if I’ve never been in that position. And the only way someone can really understand what that role’s going to involve is they need to bring that expertise in from outside or, or maybe internally.

so out of these five or six people, which were put forward to this position, I certainly was running as an underdog. And we all then had to be interviewed by the regulator. And that was a tough interview you know, hour, hour and a half, six senior members , within the FSA interviewing me, firing questions.

To be honest, I guess I went in there thinking I didn’t have too much to lose. So I think I went in there feeling, no, not confident, but reasonably relaxed about it. But what I did take, which I didn’t realize the importance of it, was the time was my understanding and knowledge of experience of working already with the Japanese overseas.

And that was something the other four or five candidates didn’t have. They weren’t able to relate how they were going to manage the business with the Tokyo Senior Management. How do you manage a Japanese equity business in London when you’ve got a dual reporting line that goes into Tokyo as well as into London.

How does that get managed? How do you manage the risk on that process? How do you manage the volatility of the P and L? Bearing in mind, the guy in Tokyo isn’t gonna be sitting in that seat for longer than three years, so he doesn’t want to take all that volatility and risk so. Yeah. After about a six week process, they came back and they said that they thought I was the right candidate.

Lawrie: Who was saying that you were the right candidate? Was it the Japanese or the FSA, or both?

Keith: It was the regulator, it was the regulator. The senior Japanese management had, sort of, had their wings clipped a little bit with this parachuting of senior people in, not, I guess, on the face of it, looking as though they were taking the role particularly seriously and it was the UK regulator who was putting all the shots and making making the decisions and, and you saw later on with my relationship with the regulator, how close do they work with the Japanese regulator as well. So I’m thinking that everything’s going from the UK regulators straight into senior management in Japan.

A lot of it was actually going into the Japanese regulator. So when the UK regulator wanted something done, and maybe the Japanese senior management weren’t happy with it, EG maybe my role at the start it would’ve been the Japanese regulator who would push from another angle saying, this is how it’s gonna be.

So, yeah. I was, I was given, I was given that role and I can remember the first day I sort of went and sat in this. Beautiful plush office, which I didn’t deserve and was quite alien to me and I, you know, in the past I’ve had, you know, hundreds of traders sitting around me shouting and screaming, and now you’re not knowing what’s gonna happen the next second, I’m in this room and you can hear a pin drop and then my new PAs walked through the door and said I’m your PA. And I’m like, well, okay, what are you gonna do? And then I sort of sat down and I thought, okay, so where’s my job? I’m looking at a computer and that’s all I’ve got in front of me. I’ve got like a blank email, a new email. I’ve now got this title being a CEO and I’m thinking, but you know, whenever you normally take a job, you are taking a job. There’s a role, there’s a responsibility that comes with that title. I didn’t have that here, so this is where I guess I ended up meeting you, Lawrie, and you helping through the process of setting up an executive committee, team C-suite, as it’s called.

That’s a real challenge. That’s gonna be the team that sort of sets the direction and the strategy of the bank, probably defines and amplifies the culture of the, of the business and ultimately the purpose. And setting a clear strategy, something which the regulator was on my case for throughout my whole career.

Now, you’ve gotta have a purpose. You’ve gotta have a bright culture, and you’ve gotta make sure you have the right strategy. And to be honest, I didn’t really know how to do that. I could identify who I thought were the senior people. Within the bank and maybe I felt they should be part of the exec team and, and that’s what I did. And I think when you first got involved with me, I think I was probably encouraging 12 to 14 people to be part of my exec team nd I think we quite clearly understood not too far down the road that , that was much too big a number. We didn’t need heads of businesses, they could just come in and report on a monthly basis so we just sort of cut it down to the COOs, the CFOs head of it HR were in there as well at a certain time business managers and ultimately compliance. But you know, the dynamics that the executive committee was quite prominent throughout my career as CEO because that changed quite dramatically as the requirements of the business changed.

Lawrie: Yeah, and I think when we’ve talked before, you’ve said that one of the first things to hit you when you went into that beautiful plush office was the entry for the CEO, which began firing itself at you with much regularity.

Keith: Yeah. Well, as a trader, you don’t get too many emails really. You know, people don’t really want to distract you.

You’re only sort of getting sort of general emails that come through and you’re only responsible for a particular trading unit or if you had a fixed income, obviously a slightly wider range, but then all of a sudden to become CEO and be responsible for the bank now everyone wants a piece of the actions or piece of me. So yeah, I went from getting about 25 emails into my intro on a daily basis to getting 500 a day.

Lawrie: My God

Keith: And I mean 500! There was coming in from Tokyo. Now you’ve gotta remember I was CEO of London, but you know, I was also head of Europe, middle East and Africa.

So I had operations and offices there. So now all these people have now heard this new guy, Keith Meekins has taken this role to CEO and I’m their boss. So they want a piece of the action as well. So I’ve got all these people I don’t even know who they’re sending emails and asking me to do things.

Lawrie: And you’ve also, Keith got the time change window, which we hear, when we’re talking to clients who are here in Europe and they’ve got headquarters in America, or in your case headquarters in Tokyo. So the day gets elongated in certain circumstances as well.

Keith: Yeah, timeframes are a challenge, especially the fact that Japan was generally no eight or nine hours ahead of us.

So as we were coming in for our day the Japanese business day was coming to an end. So what I ended up seeing was my role, apart from getting so many emails into my in tray, the phone was going a lot more as well. And I mean, at home, because come 11 o’clock in the evening. You’re now talking, that’s what, seven, eight o’clock in Japan morning.

So they’re just coming in and they’re seeing the financial markets open. So if there’s any issues or any concerns about volatility on P and Ls, any reporting that we’ve done overnight, now I’m getting a call at eleven thirty, twelve o’clock. You can imagine already having all the aggro from the day before you’re sort of mulling it over now, getting more issues before you’ve even gone to bed to get recovered from the previous day, to then start the next day. So yeah, timeframes were challenging and of course New York was five hours the other way. So they were five hours behind us. So yeah, my day. Became quite long.

But I just wanna go back to the emails because when I was sort of trading, now if you’re getting 25 emails, you could see pretty quickly there was only one or two, which are important. And you could probably just know, put the others just to one side. But when you’re sitting in the seat of CEO and it’s a new role, I never knew out of those four or 500 emails I was getting, which were the important ones and which weren’t and that was a real challenge for me of how to manage and prioritize what was coming through to me. And again, that was part of developing a sort of like a business management group. Much more of a stronger supporter infrastructure. because in the past I’d always done everything myself. There’s just no way I could do that anymore.

I’m talking about all these issues. But the one massive change for all of us was COVID. That sort of came into the mix now I’ve been sitting in the, in the seat for some time as a CEO, so I felt a lot more comfortable. But now I’d like to talk about COVID because now that was something which we as a company did an exceptionally strong job on.

I was quite fortunate. I’ve got a family friend whose son is a surgeon in Italy. And when the ripples of COVID were coming out I was getting feedback from him where there was hundreds and hundreds of people going into hospital in Italy and I think we heard late, late, late, later in the press that Italy was an area that struggled very badly with COVID.

But we were, we were getting a quick understanding from this family friend that Now the only way you’re gonna control this was to isolate people and ultimately stop people moving around, which seemed quite alien at the time but I reported this quite early on into the board and I was quite vocal about it as well.

Now, hearing about all these deaths, which weren’t really being publicised at the time. But I was hearing firsthand, you know, from a good source that this was going on, that that I said that I’m being told by this particular person in Italy that people are gonna have to wear masks, not travel, maybe work from home, be isolated, can’t mix with other people and it’s gonna happen pretty soon.

So we very early on in the mix, put in a business plan to get everyone working from home. And we staggered it in terms of importance, we prioritize. So Where’s the most important people? Well, the traders and the risk managers. They need to be up and running first, you know a support network with IT.

And we just went through this process and we also approached the regulator quite early on and told them what we were doing. And they Thought we were being a bit premature and they sort of wanted me to sort of put the brakes on. I’m trying to communicate this into Japan as well. And again, you could, you talk about cultural challenges, you know, the Japanese don’t really wanna change.

The ethos of like having a a one day in casual clothes working in the office was thought alien to them. So, you know, talking about getting people to maybe work from home just just wasn’t on their radar it, it proved to be probably one of the best decisions in the 10 years I was sitting in the seat of CEO that I made.

And we got a lot of compliments from the regulator on how we executed that. We were using the FT as an example though, for other CEOs to come and speak to us about what we’d done and how we’d implemented it so yeah, a massive change for all of us in our lives. But something where all of us, all the banks it didn’t matter whether you’re a big investment bank like Morgan Stanley Goldman’s or JP Morgan or someone like Daiwa, or HSBC. We all started off at the same level. We all started off pretty much at the same time. It wasn’t like someone had better experiences and we held and we held our own in that.

Lawrie: Interesting about the COVID because that was around the time I was working with you at Daiwa. And likewise, we hadn’t as a consulting organization done work other than broadly speaking, face-to-face. And I can remember in that 15 month period doing over 240 meetings, all of them at least an hour long with you and your colleagues at Daiwa.

So it was a big time of change for all of us. And you had, by my recollection, then obviously a relationship with the chair and the board, as did I at that time. And that relationship, it always seems to me is one of the most important, if not the most important. Chairman and the CEO in any business thoughts on the relationship between the CEO and the chair and the board more generally?

Keith: I think first off, being new in the role of A CEO with the limited experience I came to the door with it was pretty obvious I needed some strong support from the board and we didn’t have a particularly strong board at the time, and that was actually recognized by the regulator as well. So they encouraged us to diverse a little bit more on the board , and have a few more non-exec directors sitting on the board as well who could bring in that outside experience, who basically are people that’s for those that aren’t aware will be senior individuals who can sit between the board member here in Daiwa and the CEO and the regulator and sort of be a stepping stone for the regulator or stepping stone for us to smooth the process and, and make sure that the regulator’s being kept in touch with our developments and our changes and vice versa. So before I had had a Japanese chairman, which as I said, was quite a challenge for that individual or those individuals, as well as was a challenge for me.

So then getting more of a local chair Doug Van Den Aardweg, who’s a South African guy, came in with some great experience, very level-headed individual who gave me great support and he gave me great support as an example through that. COVID, he took on board what I said quite clearly, but he also identified very early on how my role as CEO changed through that period.

We changed my, my, my five days a week, went to seven days a week because people were changing their working hours. That was changing the risks of the bank. The board needed to be kept in touch and be made more aware of that. So through my tenure year period, the importance of the board sort of like peaked and trough a little to a certain extent at, at different times.

But they became more and more important as our relationship became stronger with the regulator and we had a few issues. You can get issued what’s called a 1 6 6 if you are not hitting a certain level with the regulator which could be a 65 sort, 70% sort of level that you should be hitting.

If you’ll hit a 50% target, you’ll be getting a 1 6 6, which is the equivalent of a, a yellow card in football. As an analogy if you wanted to take it that way.

Lawrie: Mm-hmm.

Keith: , but you know, to recover from something like that, you are talking about a lot of time, a lot of investment, a lot of support from the board.

because it’s very easy to point fingers and say something’s not being done correctly because you received the 1 6 6 I’m trying to think, actually, you may know Lawrie did the board, I think the board may have got a 1 6 6 I think as well where it wasn’t actually

Lawrie: I think they did. And that was at about the point where I first became acquainted with Daiwa.

so the 1 6 6 was there and it had organizational content at its heart. And that’s the big focus of the work that I did over the next 15 or 16 months.

Keith: Yeah, but you’ll, you’ll be aware as well, you know. You don’t get just sort of like a pat on the back from the regulator.

When you get your business back up to that sort of 70% level, you get penalized. So you’ve now gotta get that business back up to 90% performance level. So you’ve got that little bit of room, you know it’s not just about getting it back to where it was before and that those sort of things were taken very, very seriously.

And sometimes going into the board and reporting in other areas know whether it be compliance or risk or something where you can pick up some other one six sixes to report that into the board. That’s not a very pleasant thing for A CEO have to do. But, you know, having a board and the chairman that understood how these things happened and it wasn’t, you know,  ultimately, I had to take, I had to take responsibility for it because of my position, but the board knew that it wasn’t, you know, down to me.

Now you’ve got other senior people who are ahead of various businesses and if they’re reporting into me that certain things are being done and they’re not then. Luckily the board did understand that, but it’s an uncomfortable position. So we, with your help we had, we set up a lot of warning signs, you know, the traffic light platform and everything else, you know, whether it being know red or amber or green or something like that.

Just highlighting what’s to be looked at. What’s a concern? The board pack again, you know, this is something that Doug was quite adamant with. I think the first time he came as chair, we had a board pack, which was about 600 pages long, and that was coming out about three days before the board was sitting and, you know, and I used to say to Doug, I used to, I said, look, I can’t read 600 pages of this between now and then.

I’ve got no chance. And in a way we were all sort of faulting ourselves a little bit, that we were skimming through it and we were covering everything again, something the regulator picked us up on. So that was all consolidated and so no. Having a chair. Who could relay this to the likes of the exec committee and to CEO, but also as importantly, developed also a good relationship with the Japanese senior management to explain to them that no, we, because the Japanese will always give you a report, which is 10 times longer than it really needs to be.

Don’t get me wrong, sometimes they need to be like that, but they would invariably give you every bit of information you need. So now that, again, there was all these challenges. When I sort of think about it now as I’m talking, no, four years ago since I retired, it’s all sort of comes flooding back and I’m thinking, God, we did a lot in a relatively short period of time.

,

Lawrie: it’s in some senses then Keith, a very lonely role. There’s only one chief executive you’ve got this huge responsibility downwards into the organization. Upwards into the board of the chair outwards to Tokyo in particular against that sort of background, what were the parts you liked most about being CEO and what were the parts that you really didn’t like so much?

Keith: Taking the role on when I, when I took it on, having the ability to develop and make a new position, which wasn’t there before now, giving carte blanche for such an important role is a unique position to be given really and you know, I think I could go and have another 10 careers like I’ve had in the city, a hundred careers like I’ve had in the city.

And I don’t think that I would necessarily be in the right place or the right time and be given an opportunity like that to develop that role. But with it, as you said, comes from real challenges. And I was in a trading environment. I was in a really close knit team. In a trading team, you’ve gotta be able to trust each other.

You know, quite often you are covering for each other for lunchtime, so someone’s trading on your own, you know, dealing book. Now you’ve gotta be able to trust people implicitly, all of a sudden now I’m up in this room. I know the board reasonably well. I know the Japanese quite well but I’m on my own and everyone’s knocking on the door and I felt for a long time, like being a doctor, everyone comes in and knocks on your door.

And what I ran was an open-door policy. It was something quite early on when I was CEOI put in place. I said, now I run an open-door policy, because that’s how I’d always responded to my senior management if they gave me the opportunity to feel comfortable that I could go and talk to them about pretty much anything.

Whether it be a challenging situation, a difficult position, but now I felt comfortable enough and confident enough I could go and do that. That was something I wanted to know, embed in the people that worked under my umbrella. So I had this open-door policy, which worked very well. But no, it can also backfire a little bit.

So people would knock on your door and they would be asking you questions that you wouldn’t normally expect to get asked and about all manner of things, really personal things or the way to financial issues and everything else. And I didn’t have anyone I could look to my right or my left to, to sort of like look for a bit of support.

, and I’m sitting there thinking I’m not qualified quite often to be able to give the answers back to these people of what they want so. Now I revert back as well. I think, and you probably saw it as well, that we ended up having a really tight knit executive team, and that made it much of a much less of a lonely place for me. It enabled me to Grant Lewisa great guy that we both know became you know a right hand man for me. He sort of, the role sort of developed. He was head of economics n Daiwa, but ended up sort of developing this role you had a lot to do with him. I had a lot to do with him, but he was a great guy to sort of bounce things off.

He was very levelheaded and he would look at things quite often from a different perspective, which is what you needed. But yeah, there was a lot of pressures. A lot of pressures. Now  I did find it quite lonely certainly through COVID I found it quite lonely because, you know, I’m sitting in my office like I am now responsible for the business and the regulators mo wanting and expecting me to be managing it as if I’m sitting in the office in London and realisticly, You can’t do that. And, and if something goes wrong, I don’t have the excuse that, no, sorry I wasn’t in the office. It’s down to my responsibility. So did retirement come at a good time for me?

No. After sitting in that seat for 10 years and also I think with where the business was evolving going through COVID no, we just had a, a good and a successful financial year it was probably time to move on, but I still can’t get the trading aspect outta me. I still run my own share portfolio.

We often talk about it on a monthly basis, trying to put the world to rights and thinking where we can make the next buck but yeah, retirement. . I’m loving. And, and a lot of people knowing me said, why are you gonna retire, Keith? Why are you retiring? Or why don’t you look at another challenge?

And I didn’t know whether I was gonna be able to sort of manage all this spare time, but I think the old average is, and I look back on it now and think, how the hell did I hold down a job? You know, with the amount of other things that I’m doing. It’s but yeah so, so there’s good things that come outta that.

it’s a, it’s a lonely role, but you know, it became less lonely when you sort of became a bit more of a mentor for me, which that’s how our relationship evolved and developed as well, where now a lot of trust, a lot of honesty, a lot of openness to each other so that sort of took that loneliness away a little bit.

And now I can understand why, you know, CEOs of these big corporates and all these the big investment banks now have these exec teams, but also have this business management team around them because, you know, you just can’t do it all on your own.

Lawrie: Well, Keith, it’s been a very exciting story and hearing all of the dimensions that we have on this podcast we always finish with asking the question, your pet hate and your secret passion.

So both of those, your pet hate and your secret passion.

Keith: Okay my pet hate is a very easy one. I hate people being late. My father always taught me from a very early age how rude it is to be late. You know, your time is not more important than anyone else’s. And that was an ethos that I carried through out my career really.  Yeah. Sometimes there are reasons why people have been, are late, but no one guy made a mistake of walking into the executive meeting once with a coffee and telling me, sorry, it was five minutes late. because he’d had to go over the road to pick up his cup of of drink, didn’t go down too well and I made it quite clear to him that that cup of coffee cost him £10,000 pounds because that was the cost of all of us sitting there around that table. And now that may sound a bit arrogant, but he never did it again. And no, being late, it’s an easy thing not to do. No, I was prepared for this meeting today.

We started at 12. I was ready at 1130. Any hiccup that we’re gonna have, I was prepared for. I didn’t turn up five minutes past 12 and you guys have been sitting there waiting. It’s, it’s an unnecessary flawh I think in, in humans sometimes, but it’s something that really, really bugs me and it’s something which I don’t tolerate and maybe I’m, maybe I’ve gone the other way in my old age, but yeah, don’t be late if you’re me to me because it pisses me off.

Lawrie: Well, before we get to your secret passion Keith, I can tell you that as a young consultant, I had to go in Coopers and Lybrand to see Lord Henry Benson, who was the senior partner and a pretty powerful character.

And I would not be late. I turned up to his office at three minutes to 10 for the 10 o’clock meeting and Henry was standing in his outer office and he looked at me rather like I was a growth on a meat pie. And he said, are you Philpott? And I said, I am sir. He said, well, if you are less than five minutes early for a meeting, you’re late.

And I’ve never forgotten that, which has enabled me just to tell you. So we move on then to your secret passion.

Keith: I’ve got two secret passions, really. One of them, which no one would probably really know about, was I really enjoy fly fishing. One of the privileges of working in the bond markets and dealing a lot with brokers is that they wanted to entertain you and they always want to try and find something different.

So rather than going down the pub or going to a nice restaurant, I would say look, save all that up and maybe once or twice a year, let’s go down to the river Itchen or the river Test near Stockbridge and you know let’s go , trout fishing I tried to push it a little bit. I got to Ross-on-Wye so the river Wye , which was the closest I’ve got to a salmon river.

But my passion now is to catch a salmon. So fly fishing, catch a salmon, the salmon fish to catch, I think is called the the fish of 10,000 casts. I think you need to cast 10,000 times to catch the elusive fish. So yeah, fishing in the background is something I found very therapeutic and didn’t get an opportunity to do a lot of it, but I’m getting to do a bit more of it now.

And the other passion I’ve got, which is more local actually is I live quite close to Deal on the South coast, southeast coast, and I’ve got involved with Deal Football Club. A passion of mine has always been football. I’ve loved sport I support the club in various ways. I’ve been approached to go on their board, which I’m sort of steering a little bit away from at the moment the board do a fantastic job down there. They’re all volunteers and know I’ve got a very close relationship with them, so know financially I like to try and support them with the odd bit of sponsorship and, it’s become a place where I’ve met a lot of new people and made a lot of new friends.

So yeah, fly fishing but you won’t get me doing fly fishing on a Saturday afternoon when I’m down there watching football.

Lawrie: Well, thank you Keith. And if viewers and listeners have got things they wanna say about this particular episode, then you can always email us on podcast@leadershiplistening.com.

But for now, Keith, thank you ever so much for your time this morning. A really interesting light has been thrown on the world of investment banking and the world of the CEO within investment banking. Thank you.