Royal Bank of Scotland yesterday unveiled a boardroom shake-up aimed at satisfying shareholder demands � adding three non-executive directors with international financial sector experience.

Royal Bank of Scotland yesterday unveiled a boardroom shake-up aimed at satisfying shareholder demands - adding three non-executive directors with international financial sector experience.

The new recruits include Stephen Hester, the former finance director of Abbey National.

Amid sniping from some segments of the City about too many Scots being on the board of Royal, the bank's global search for top talent has turned up Dumfriesshire native John McFarlane.

However, critics would seem likely to find it difficult to accuse Royal of being parochial given that McFarlane worked as chief executive of Australia and New Zealand Banking Group for a decade before his retirement last year. And, prior to that, he worked for Standard Chartered in London and Hong Kong and for US group Citibank.

The boardroom reshuffle, which also involves the departure of two non-executive directors associated with Royal's US business, will increase the number of Scots on Royal's board from seven to eight, including chief executive Sir Fred Goodwin and chairman Sir Tom McKillop.

The third of the three new non-executive directors who will join Royal's board on October 1 is Arthur (Art) Ryan, who retired as chairman of US insurer Prudential Financial Inc in May 2008 after leading this organisation for nearly 14 years.

There will, following the three additions and two departures, be 12 independent non-executive and five executive directors on Royal's board, in addition to the chairman.

McKillop is understood to have worked very closely with Royal's institutional investors in recent months to find out exactly the type of experience they wished to see added to the bank's board.

One well-placed industry source said Ayrshire-born McKillop, former chief executive of pharmaceuticals giant AstraZeneca, would have taken the issue of who might ultimately succeed him into account in his leadership of the search for new non-executive directors.

There has been much speculation about how long McKillop will remain chairman, with Royal announcing £5.9bn of writedowns related to the global credit crisis in April and raising £12bn in what was Europe's biggest-ever rights issue.

However, when Royal announced a first-half loss of £691m earlier this month, McKillop and Goodwin both made it clear they were focused on recovering lost shareholder value and signalled they would be around for the foreseeable future.

It would meantime seem likely that one of the three newcomers would succeed Australian Bob Scott, former chief executive of insurer CGNU (now Aviva), as senior independent director of Royal. Scott joined Royal in January 2001 and would satisfy the definition of "independent" only until the start of 2010.

Edinburgh-based Standard Life Investments, a significant investor in Royal, welcomed the boardroom changes.

Guy Jubb, head of corporate governance at Standard Life Investments, said: "These changes are very welcome and demonstrate that the RBS board is getting to grips with its governance."

Hester, who with fellow investment banker Luqman Arnold played a big part in restructuring Abbey National ahead of its sale to Spanish bank Santander in 2004, is now chief executive of commercial property group British Land.

His experience in restructuring Abbey's balance sheet is likely to be of significant benefit to Royal as it attempts to deleverage by offloading or restructuring loans as it faces up to the fall-out from the global credit crunch.

Hester's knowledge of the commercial property market would also seem a valuable asset to Royal amid the current downturn in this sector.

McFarlane also has experience of this sector, as a non-executive director of retail property company Westfield Holdings.

He is also a director of Old Oak Holdings, the parent company of hedge fund operation Toscafund. Old Oak is chaired by former Royal Bank chairman Sir George Mathewson.

The industry source noted that all three new non-executive directors had, during their careers, been at the helm of organisations which faced challenging market conditions or were having to refocus and dispose of assets.

The boardroom changes will see Larry Fish, who as the long-time head of Royal's business in the US often hit the headlines for earning more than the group chief executive, end his long association with the Scottish bank within months.

Fish was recruited from Bank of Boston in 1992 to become chief executive of Royal's Citizens business in the US, and joined the Scottish bank's board in January 1993. He was an executive director of Royal until May 1 this year, when he moved to a part-time role.

Royal said Fish would retire "ahead of the AGM (annual general meeting) in April 2009".

It also gave this timescale for the departure of Charles (Bud) Koch, who headed Charter One and joined Royal's board when it took over this US bank in 2004.

Royal, together with Santander and Belgian-Dutch insurer and bank Fortis, completed a consortium acquisition of Amsterdam-based ABN Amro in October last year. Royal's part in the break-up bid, which expanded its presence significantly in Asia and brought it the vast bulk of ABN's global corporate banking and financial markets activities, was about £10bn.

After the deal was completed, McKillop is understood to have gone to the Royal board in December with plans to recruit new non-executive directors, with headhunters engaged to conduct the search in January.

Royal had, when it unveiled its rights issue in April, pledged to appoint three new non-executive directors.

Shares in Royal Bank of Scotland rose 4p to 221.75p yesterday in a generally positive sector.