Who would want to be a bank director in London these days? Not Alan Thomson, a member of the audit and risk committee at HSBC Bank who, according to fellow columnist Mark Kleinman, has tendered his resignation. Maybe not John Trueman, who is said to be considering his position as deputy chair of the legal entity that manages the UK high street and commercial bank.
It’s not difficult to see that being a bank director now entails a high degree of personal risk. Under proposals from the Prudential Regulatory Authority (PRA), bank directors and other top executives could face a new criminal liability if they’re deemed to have taken reckless decisions which have led to the collapse of their employer. Crucially, there’s also a suggested reversal of the burden of proof that puts the onus on the director to prove innocence.
Few people considered it right that the likes of Fred Goodwin walked away with their pension pots initially intact after embarking on a strategy of expensive acquisitions that drove RBS into the ground.
But there’s a danger that being a bank director in the current environment will have little appeal, given the risks involved with it.
Pity RBS, for example, which is trying to recruit a chairman to take over from Sir Philip Hampton who is off to take the same position at Glaxosmithkline.
As one banker told me: “If you’ve got a certain set of skills and you have a choice between banking and some other sector, why do banking? Why be subjected to live-broadcast select committee meetings, pay clawbacks and the threat of jail when you could quite easily go into a sector that’s less in the public eye.” That’s something to bear in mind at the PRA.