01 February, 2012

Lie Down Mr Goodwin

Arise Sir Fred, the Queen of England said in 2004 after tapping the kneeling Fred Goodwin lightly on the shoulder with her sword. This archaic ceremony is the conferring of knighthood by the Queen of England. If you are a citizen of the UK or one of its dominions then you can call yourself  "Sir".

Fred Goodwin was the CEO of the Royal Bank of Scotland in its boom years. An unknown, middling bank in Scotland (where's that for Gods sake), he took it to become one of the largest banks in the world. First the acquisition of Natwest, a big British bank much bigger than RBS. And then the mega takeover of ABN Amro, just as the financial crisis was unfolding. The bank was growing wildly through mega acquisitions and was cheered on by all and sundry - the shareholders, the market and even the government, including Gordon Brown, the then Prime Minister of the UK. Hence the knighthood. Sir Fred could do no wrong.

Of course the party couldn't last. It came crashing down with the financial crisis. Sir Fred was axed after the bank reported a loss of £24 bn - the largest in UK corporate history. The UK government had to inject £45 bn to bail out RBS. The public was baying for his blood. He compunded his misery by trying to keep his £16m pension pot - for the years of service he had rendered. Public outcry forced him to give up part of this, although that's an unfair step - if you have to give up your accumulated PF because of a mistake you made, how unfair would it be for you.

Now the UK government has decided to withdraw his knighthood. This is very rarely done. He has for company, Anthony Blunt (a spy), Nicoale Ceausescu, the notorious dictator of Romania and Robert Mugabe, the tyrant of Zimbabwe who were all knighted and the knighthood subsequently withdrawn when it was realised what scoundrels they were. Fred Goodwin is however no scoundrel. The withdrawal was the result of a baying mob (otherwise called the British tabloid press) just wanting to inflict its own brand of punishment.

Fred Goodwin wasn't the first, and certainly won't be the last, to mistime a huge acquisition (ABN Amro) and get killed in the process. He made a bad misjudgement of the extent of the financial crisis - after all who didn't. But he did no crime. He hasn't even been charged, let alone convicted of any wrong doing. If business misjudgement was a crime, each one of us is a criminal. At that time, the shareholders of RBS enthusiastically supported his every move. There are many others who have been conferred knighthoods and were equally in the mess of the financial crisis.

The British are justifiably famous for their sense of honour and fair play. In this instance however, that noble quality seems to have deserted them. Punishing Sir Fred, with Mr Goodwin isn't cricket, old chaps !

14 comments:

Appu said...

They made even you to write a post against them ;)
See this is why they should have had News of the world, so the tabloids would have been in pursuit of When the other prince is gettin married when will the next heir to throne be born and now you have tabloids chasing bankers!!

I know you would have read it
still [cpuldnt resist it]
http://www.economist.com/blogs/schumpeter/2012/01/rbs-saga

http://www.economist.com/blogs/buttonwood/2012/01/bankers-pay?page=1

J said...

Maybe the Queen needs to seriously reconsider who qualifies for knighthood in the first place. I agree that "Sir Fred" is being singled out for a bigger problem but still it is an embarrassment to the British monarchy. Personally, I dont think a CEO who is doing his job well (as was thought to be the case here) deserves to be called "Sir". My own romantic notion of knighthood deserves some truly noble or great act - curing cancer and the like.

Ramesh said...

@Zeno - Ogh tabloids love chasing bankers even when there are plenty of Page 3 options. I don't like the rem system for bankers, but that doesn't mean I agree with the witchhunt and pettiness that is happening with Fred Goodwin

@J - Oh the romantic notions of knighthood and chivalry are long gone. Its given to all and sundry - especially virtully every senior civil servant. But I agree they should be more careful in dishing it out - maybe now they will be.

Lovely to see you back here !

gils said...

slurp..i await the next novel from Jeffrey archer on this :) already sounds like first half of the plot..

Ramesh said...

@Gils - Ha Ha Ha

Asha said...

If any of GB's ex colonies are also included for knighthood, WE bloggers would recommend her highness to confer the title on you for being so well informed and sharing the same with us.

Thank you "Sir" for the news.

Sandhya Sriram said...

i dont know, but in this hard world of mean business, where the only color of life in life is green, does symbolism still exists

while i cant comment that whether some one who has just made some more money in business deserves knighthood, i somehow also feel that if someone doesnt have the love and respect of the nation he represents, he cannot be a knight of the nation.

so well, i know this sounds foolish and emotional, but i dont completely agree with you here.

Ramesh said...

@Asha - Totally flattered. Much honoured.

@Sandhya - Knighthood has long moved from chivalry and nobility to being an honour for achievement. If you see it that was, why should business achievement be any less than say artistic achievement. Agree that you have to be careful in defining success though.

Vishal said...

well, this is one thing that does not go down well with me. Punishment is something well documented in laws and have judicial process attached to it. Just because public perception wants to make someone scapegoat and it would seem diplomatically correct at that point in time, really does not mean that the line of fairness should be crossed. Having said that, who thought life was fair!

Ramesh said...

@Vishal - Oh yes, life isn't fair, but at least we can moan about it !

Deepa said...

when I saw the piece on BBC, I first thought it was ridiculous to strip him of his knighthood. But then I thought, how meaningless the whole conferring of knighthood (and even the withdrawal of it) sounds in today's world. I wonder if they (the royal family) still hold the prerogative to confer such titles.

Ramesh said...

@Deepa - Oh the knighthood has just become another civilian honour - like the Padma Vibushan in India. The Government decides, and the Queen simply does the honours.

Reflections said...

Stripping him of the knighthood seems like rather drastic....maybe the pressure from the media must have been terrible..:-(
Seriously they should consider having a few rules in place before offering knighthood to just about anybody.

Ramesh said...

@Reflections - Not fair no ??