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Servants of the people

I’M NOT a robot and there have been some deeply depressing moments over the last three years,” RBS chief executive Stephen Hester told BBC Radio Four’s Today programme during the peak of the furore into his million-pound bonus. “In the end, I came to the conclusion that it would be indulgent for me to resign.”

Hester’s comments could be construed as suggesting that his job has transcended that of serving “shareholders”, but he has effectively morphed into a public servant. Some might argue “what’s the difference?”, bearing in mind the huge stake the taxpayer has in RBS.

Direct government intervention into the running of businesses is, by and large, unwelcome – unless it’s in the direction of parts of UK plc that the public are more attached to, where town and city ecosystems are threatened with disaster by the closure of, say, a plant.

The financial services industry has to accept that its failure to fully appreciate its business models and the risks that lie within them means it will continue under an indefinite public, regulatory and parliamentary microscope.

With that in mind, why on earth would well-respected and experienced finance director and banker Bruce Van Saun decide to schlep across the pond to take on the CFO role at RBS?

As with all these situations, what can appear a toxic job to many will be viewed as an opportunity for others.

In his first major UK interview, Van Saun provides Financial Director with some of the context of his appointment.

“What would be really interesting for another five-year burst that will give you self-satisfaction, and hopefully position you for the next thing, or one last thing if that’s what it turns out to be. This fits the bill,” he told us. Crucially, perhaps, he previously spent two years as an advisor to private equity.

The RBS CFO role, in the context of the major issues it faced, must have proved too big a challenge to turn down. A once-in-a lifetime chance to turn around a bank in what is hopefully a once-in-a-lifetime perilous position.

But for those that think it a no-lose situation for Van Saun would be minded to consider again the coverage reserved for Hester in recent weeks. Indeed, Van Saun talks of the negativity the executives, and the industry, face.

While the pair want to be left to get on with the job at hand, being answerable to the public is the quid pro quo for having the chance to potentially turn around a UK and global institution.

While RBS’ ownership structure is unusual, its directors must consider what impact this has on communicating to its shareholders – us – that their performance is creditable and worthy of appreciation.

If they can get the public to appreciate the grand things they have achieved over the past few years – why financial services is so important to the UK and dare I suggest, that they deserve their bonuses – then that could be their biggest achievement.

 

Kevin Reed, Editor

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