I don’t think I am alone in feeling a bit uncomfortable about the recent treatment of Stephen Hester and Fred Goodwin. I suspect there are those who share my views, but don’t particularly want to air them, and I respect them for that.
Taking the case of bonuses first, the bonus system is an established procedure in banking. OK, it may seem inappropriate now, and maybe it should be changed, but it’s what we have in place at present. Stephen Hester was appointed to do a difficult job, and he has done well, compared with what might have happened to RBS. It’s not fair to accuse him of not making a profit, because the balance sheet was in such a parlous state when he took over. Instead he significantly reduced the potential loss, which amounts to making a profit starting from a negative base point! The bonus that he was to have been paid was significantly less than in previous years, and was a reflection of the job he had done. For that reason, I think he should have received it, and the unseemly baying by politicians (of all parties including my own) and the media, which eventually forced him to waive it, was not a pretty spectacle. Until a new system is introduced that overhauls the existing bonus system, we have to work with what we have, and not choose piecemeal targets to satisfy some kind of ‘Robin Hood’ instinct that seems to have crept into the way of thinking of many.
Secondly, I agree with those that have criticised the removal of Fred Goodwin’s knighthood. He was not singly responsible for the banking crisis, and has been treated as a scapegoat. Former Labour Trade Minister and ex-Confederation of British Industry head Lord Digby Jones said there was “the faint whiff of the lynch mob on the village green” about the decision (although he said he didn’t disagree with it), and Alistair Darling, writing in the Times, said there was “something tawdry” about the government singling out Mr Goodwin. Again, there is the feeling of the need to find a high profile target and shoot them down, to some how make everyone feel better. It certainly doesn’t make me feel any better; on the contrary I am upset and disappointed by these recent events.