They Just Don’t Get It #5: Sir Tom McKillop
The state is now the majority shareholder in RBS and the biggest shareholder in other banks.
This did not happen because of some leftist urge by a retro Labour government, but because they needed rescuing from their own folly.
It does not look like their directors get this.
Yesterday’s Standard reveals how RBS Chairman Sir Tom McKillop tried to hang on to his job. He:
“refused to accept any personal blame, digging his heels in. On Sunday, as talks with the Treasury on the amount of taxpayers’ money required to save his bank were taking place, he tried to get his fellow directors to agree that they would resign en masse if he was forced out.
Needless to say, they told him where to go.”
Other reports have revealed how Sir Fred Goodwin argued for a pay-off before he resigned, but got short shrift from new City Minister Paul Myners. The same Standard story has Sir Fred describing this as:
“Less of a negotiation, more of a drive-by shooting.”
But while the government was obviously tough when the deal was being done, there are still doubts about whether either ministers or the bank board understand the new reality.
Today’s Guardian reports that even though Sir Tom McKillop has had to promise to go by the next AGM and that he has a new majority owner that merely wants to appoint three non-exec directors, he:
“has played down the significance of the government’s influence in the boardroom. He said that the RBS board was already planning changes as board members would be retiring and that the government merely wanted “input” on possible appointments. Anyone joining the RBS board would be approved by the existing members, he said.”
Let us hope that this is a another case of not getting it, as a big bank without a majority owner exercising its obligations as owner is potentially very dangerous indeed.
The test for this will be what happen to the tax avoidance and tax haven arms of the banks. It would be absurd for banks reliant on tax payer support to continue their tax avoidance activities in tax havens. The indefatigable Richard Murphy has more on this, and Vince Cable has pressed this on the government though I’ve not seen the coverage that this deserves other than on Bloomberg.
This is not an issue that will go away. The French are calling for a major move against tax havens according to the Tax Justice Network blog. And just in, Richard reports a hilarious round of denials from the banks in the new Private Eye that they ever do this kind of thing .