Friday February 3, 2012
Removal of ex-RBS boss’ title sparks concern
LONDON: The decision to strip the former Royal Bank of Scotland (RBS) boss of his knighthood marks a new high in “banker bashing” sparked by the financial crisis, and left business figures asking if it had gone too far.
But other critics said Fred Goodwin’s fate should serve as an example to encourage the banking industry to put its house in order.
Goodwin, nicknamed “Fred the Shred” for his ruthless management style, became a pariah after the government bailed out RBS in 2008, at a cost so far of £45.5bil (US$71.5bil).
With Britain on the brink of recession once again, attention has returned to the behaviour of bankers blamed for the financial storm, particularly at RBS, 82% of which is still owned by the taxpayer.
Amid growing calls for Goodwin to be punished further, the government announced late Tuesday that he would be stripped of the knighthood awarded him by Queen Elizabeth II for services to banking in 2004.
A statement from the government said Goodwin “had brought the honours system into disrepute,” adding that “the scale and severity of the impact of his actions as CEO of RBS made this an exceptional case.”
The decision places Goodwin in a select club that also includes Zimbabwean President Robert Mugabe, Soviet spy Anthony Blunt, and Romanian Communist dictator Nicolae Ceausescu, who lost his honour the day before he was executed.
Prime Minister David Cameron called the move – which removes Goodwin’s ‘Sir’ title – the “right decision.” Opposition Labour leader Ed Miliband said it was “only the start of the change we need” in company boardrooms.
The annulment came at the end of a week when political pressure had also forced the current RBS chief, Stephen Hester, to waive his £963,000 (US$1.5mil) annual bonus.
The former head of the business lobby group CBI, Digby Jones, said: “There is a whiff of the lynch mob on the village green about this.
“Fred Goodwin has not been charged with, nor had anything examined in a court, nor found guilty of anything.”
Simon Walker, director general of the Institute of Directors, also expressed concern about “anti-business hysteria” in the decision to remove the honour.
Labour’s finance minister at the time of the RBS takeover, Alistair Darling, questioned the singling out of Goodwin for public humiliation.
“There is something tawdry about the government directing its fire at Fred Goodwin alone,” he wrote in The Times.
“If policy is not based on principle but is about individuals, the government will carry on being blown in the wind.”
Even Britain’s biggest trade union, Unite, was ambivalent.
A spokesman said the decision was a “token gesture” that would be well received by all those who lost their jobs under Goodwin, but would “do nothing to bring job security to the staff across the banking sector who continue to work under a culture of excess and greed at the top.”
Jackie Stewart, the former Formula 1 world champion and himself a “Sir”, said he thought his friend Goodwin had been made a scapegoat. – AFP