Banks’ directors are too focused on complaining about the risk of going to jail, and not doing enough to work on the big objectives of their companies, the Bank of England’s Martin Taylor said yesterday.
To run a bank properly, non-executives should work together on the big strategic direction of the bank.
Currently, they often appeared to be “drowning in data,” and must make sure they did not get bogged down in the detail, he said.
And in particular directors need to focus on getting the big things right, rather than dwelling on personal risks.
“To hear what directors have been saying recently, you’d almost think the exam question was ‘How can board members stay out of jail?’” Taylor said at the Oliver Wyman Institute annual conference in London.
“That seems to me too modest an objective for financial titans to set themselves.”
He argued that the solution lay in large part in making sure the board’s committees carried out their detailed roles thoroughly, while the board itself looks at the strategic direction of the business.
“The board committees, in banking and elsewhere, need to be the obedient servants of the board, not its masters,” Taylor said.