The modern manual of chief executive apologies for corporate cock-ups is short: 1) say sorry, 2) stress customers are your priority, 3) praise staff for working hard to solve the problem, 4) say sorry again. Repeat, ad nauseam.
Royal Bank of Scotland’s Stephen Hester managed to follow these simple rules on Monday in his first public appearance since a software failure left millions of customers of RBS, Natwest and Ulster Bank unable to access bank accounts or make transactions. In an interview with Sky News, he was serious, he was plain-spoken and he was in Edinburgh. This last is important, not only because jet-setting while customers suffer is a bad look for a banker, but because there is already an undertone of complaint that an RBS decision to outsource IT services may be to blame for the problem – something Mr Hester denied. Read more
A highly paid manager doing his duty for the nation resigns in a huff after his ultimate paymasters interfere with his right to manage. Fabio Capello, manager of the England football team, has done what Stephen Hester, chief executive of state-controlled Royal Bank of Scotland, declined to do.
Mr Hester – who spent most of Wednesday doing interviews to explain his decision to stay, despite the row over his bonus – has told the world that it would have been “indulgent” to resign. At the same time, he has sent a strong message to the government that if it wants to earn a return on the taxpayer’s £45bn forced investment in RBS, it should leave him alone.
To use Mr Hester’s terminology (and assuming that the England manager jumped and wasn’t pushed), by comparison, Mr Capello’s decision looks, frankly, indulgent. If the FT’s Simon Kuper is right, the resignation has less to do with the Football Association’s decision to override his view on whether John Terry should keep the England captaincy, and more to do with England’s poor prospects in the coming Euro 2012 tournament and the potential that it would put a blot on Mr Capello’s reputation. Read more
Politicians would like to think that Stephen Hester’s decision to give up his bonus marks the start of a mass renunciation of “excessive pay” by private sector bosses. It is certainly time the UK corporate and political world moved on and refocused on what is really important: i.e. how to restore growth. But far from starting a trend, the Royal Bank of Scotland CEO’s case is unique. Here are three reasons why: Read more
Contrast the reaction to rewards paid to UK bank executives – £28m in share bonuses and long-term incentives to nine Royal Bank of Scotland officers, for instance – with the response to stock awards worth almost $100m for Ford Motor’s Alan Mulally and Bill Ford.
Both pay-outs are being made to executives who took on big turnround jobs – and had no responsibility for what went before. Both contain deferred elements. Both, let’s face it, are huge in absolute terms, however you cut them. But whereas many people seem to believe Mulally, Ford’s CEO, deserves his pay-out, his RBS counterpart Stephen Hester and colleagues have attracted mainly brickbats for their rewards. Read more