At a meeting of City friends I was intrigued by the discussion concerning responsibility and accountability in financial services today. Bearing in mind the age range within the discussion and our vastly different backgrounds it was fascinating that we all
arrived at a consensus and a definition of responsibility and accountability.
In my mind responsibility is where the buck stops, but accountability is where the decision is allowed to be made. A core attribute for any management at any level within any organisation or market structure you would think. Yet at the various Parliamentary
enquiries what has stood out is the almost dearth of responsibility throughout the LIBOR saga and the non-existent accountability that has been presented.
It would be great if when such a breakdown of core market operations is shown to be fallible and open to abuse those responsible would recognise their responsibility and own up to their failings. Instead we have no one at Barclays taking responsibility,
along with no body at the Bank of England or the FSA or the Treasury or the Government. Surely someone is responsible?
Saying sorry and being contrite indicates they have taken responsibility but during the LIBOR scandal no one was prepared to take actual responsibility to raise the issue and take action. More embarrassing, this was left to the Fed in the US to start the
ball rolling in the whole sorry mess.
The Bank of England’s get out is that they no longer have regulatory responsibility as it was taken away from them by the Labour government. But did they not have a responsibility as a pivotal institution in the market to say something?
Governments and Politicians are not really noted for taking any responsibility, they always play the blame game and to a degree we can question their right to preach morals after the expenses scandals. Thus, having come to the conclusion that there is no
person or organisation prepared to own up to their responsibility, the question turns to accountability.
The people at Barclays accountable have either been sacked or are still waiting to be sanctioned whilst at the Bank of England those accountable will probably be side-lined or eventually be moved on. The FSA who are surely accountable for the efficiency
of the regulatory operation will produce no one that can be shown to be accountable and the Government and Treasury much the same.
It strikes me that we have to make people responsible and accountable for their actions if we are to rebuild the reputation of financial services. This has to be from top down with people recognised for their responsibility and rewarded as such, but accountable
when things go wrong or they don’t perform. This is the way industries and businesses operate in the real and normal world.
So let’s have the FSA assign people who will be responsible for a regulation and if it goes wrong they will be accountable, the same at Barclays (and all banks), the Bank of England and the Treasury.
This is not, I might add, a witch hunt, but a simple matter of management structure that says from Board down everyone has clearly defined responsibilities and is accountable for their actions and that these roles and responsibilities have to be widely recognised.
Such a simple structure would also assist in the recruitment of the right calibre of person to fill the roles that demand responsibility and accountability to be primary alongside ethical and moral standards.
Before we have any chance of beginning the rebuild of financial services we must first find people that have standing, moral and ethical knights and a capacity to see the industry as servicing clients and customers first and foremost and where personal gain
is proportionate to the success they achieve within a corporate rewards structure.
If we don’t own up to the responsibilities and accountability and do not accept where things have totally broken down, what chance will we have of reconstruction? None!