New Labour peer Margaret McDonagh has parachuted onto the board of Standard Life in a reshuffle of the top seats that will see chairman Brian Stewart replaced by his deputy Gerry Grimstone.

Stewart will retire from the board after the company’s annual general meeting on 29 May. Also leaving are John Hylands, who steered the company through demutualisation, and former financial journalist Alison Mitchell who has been on the board since 2000.

Grimstone has served as a director of Standard Life (SL.) since July 2003 although the company reported that its nomination & governance committee interviewed both internal and external applicants before settling on him.

McDonagh’s appointment comes into effect today. She is best known for a three-year stint until 2001 as the Labour Party’s first woman and youngest ever general secretary where her management style saw her portrayed as the embodiment of the party’s obsession with ‘control freakery’. The post was the culmination of a long career as a party organiser, including playing a key part in Labour’s successful 1997 general election campaign.

She later worked as general manager of Express Newspapers and as a business consultant. She was appointed to the House of Lords in 2004.

McDonagh’s appointment comes as the company announced that Hylands will step down from the board on 31 March after five years as an executive director.

His key role came in 2004 when he led the project to demutualise the firm. He was previously group finance director for four years and head of UK marketing for seven years before that.

The company has reported that he is leaving to pursue other opportunities.