Rewards for Failure

Rewards for Failure

John Bercow, Tom Watson and Karie Murphy should be feeling quite aggrieved, having apparently been blackballed from receiving peerages because of ongoing investigations into allegations about past behaviour. What is this novel concept of holding people accountable for their actions? It hasn’t been like this for ages – ever since lying, lustful Profumo went into the library with the metaphorical whisky and revolver. Soo unfair!

Consider: Bernard Hogan-Howe, the Metropolitan Police Commissioner in charge when the Met made a fool of itself over the Carl Beech affair (in which Watson played a critical role), and for which he (and Watson) eventually apologised. He was in charge when this misconceived investigation happened, misconceived not just because the accuser turned out to be a lying paedophile (a fact which might have been ascertained sooner had the police bothered inspecting his computer) but because it showed a fundamental misunderstanding of the burden of proof and the nature of a criminal investigation. Pretty serious errors, one might have thought. These were not the only problems during his time in charge: his force’s treatment of journalists does not bear close examination (50 arrests, 3 convictions, the misuse of anti-terror legislation to obtain journalists’ sources and hack their calls). Nor did its treatment of mentally disabled people under arrest, where again he refused to apologise until forced to (though action was later taken to improve matters).

His reward? Elevation to the Lords and now a job as a non-executive Board Member to the Cabinet Office, on the audit and risk committee no less. What is he expected to do? Bring his “wealth of experience and expertise” to help “focus on the Government’s priorities” apparently. Just to remind you, these are: “responding to the coronavirus pandemic, preparing for the end of the EU exit transition period on 31 December 2020, strengthening the integrity of the Union, and improving the efficiency of the public sector.” All going swimmingly no doubt.

Whatever else he has been doing, he forgot to tell his successor, Cressida Dick, that having scores of policemen lined up close together on Westminster Bridge (along with others) applauding the NHS was perhaps not the most sensible approach to risk in the middle of a pandemic and in defiance of the government’s guidelines and rules. Still, Cressida has been almost as lucky as Bernard. Being in charge when an innocent Brazilian was shot dead is no bar to promotion to the top job, it seems.

Example 2: Chris Grayling, whose longevity as a Minister is simply unfathomable. Some Ministers achieve nothing. Others fail to do stuff that needs doing. Others preside over problems and disasters, not all of them of their own making. Yet others achieve changes which more or less work. Grayling is in a class of his own. Pretty much every change he made in Justice and Transport has been disastrous (the privatisation of the Probation Service, now reversed), ill-considered (pretty much everything at Justice), unkind (the ban on books for prisoners) or has cost the taxpayer money (Seaborne Freight and Eurotunnel). Most of them have had to be undone in pretty short order, those that weren’t declared illegal, that is. If Grayling were a dog being shown at Crufts, his owner would be running after him with a poop scoop while simultaneously trying to relay the carpet that his hound was chewing up on his way to the podium.

This record has resulted in him being nominated to chair the Commons’ Intelligence and Security Committee (yet to meet some six months after the election and despite some obvious issues for it to review – China, for instance) and to become a trustee of the National Portrait Gallery. Why?

Think the private sector is better? Think again. A CEO of a major European investment bank, under whose leadership the bank became the object of the UK’s biggest fraud by one of its traders and was heavily fined for its activities in the Libor-fixing and FX-rigging scandals (ca. $1.8 billion) would, you’d have thought, counted himself lucky to be allowed to fold his tent and creep off into the night. No. Both German and British regulators thought him suitable to be in charge of the proposed merged London and German stock exchange. (Stock exchanges are not simply businesses; they also have a regulatory function, something you’d hope the Boards and regulators would bear in mind when making and approving appointments.) Fortunately – in this case anyway – Brexit happened, the proposed merger collapsed and the CEO resigned. (The coda to this was the three-year investigation by German prosecutors into dealing by the CEO in the exchange’s shares, all eventually resolved with a fine for the exchange and repayment of €4.8 million by the CEO.) Such a bother for all concerned! Was there really no-one else available? The CEO is now chairing another FCA-regulated asset management firm and on the Board of a US wealth management company. Remember this when regulators tell you they have learnt lessons and the financial sector’s culture has improved.

So we come to the Post Office, its disastrous Horizon accounting system and the ca. 900 sub-postmasters hounded out of their jobs, prosecuted or made bankrupt as a result of Post Office management being unable or unwilling to entertain the possibility that its IT system was not fit for purpose, followed by years of denial (and worse). It is an astonishing scandal which went on for years from 2000 onwards, in part because of senior management’s refusal to realise that it had an issue or, once realised, to deal with it effectively. So blatant was this, that in his judgment last December, Mr Justice Fraser described the organisation’s approach as “institutional obstinacy” amounting to “denials that ignore what has actually occurred…….It amounts to the 21st century equivalent of maintaining that the earth is flat.”Oof!

So what happened to the CEO in charge between 2012 – 2019? One Paula Vennalls, an Anglican priest as well as businesswoman (Paul Flowers – remember his inglorious period at the Co-op Bank – waves hello). She left (having earned £4.9 million during her time as CEO), got a CBE for services to the Post Office, a non-executive post with the Cabinet office (now rescinded) and sits on various other Boards. Is this entirely fitting for the person who for 7 years presided over behaviour which was last week described in the Commons by MPs as leading to “one of the largest miscarriages of justice in the UK’s history”?

What will it take for those in leadership positions to realise that being a leader is not about taking the money and the glory, not about using one position to lever yourself into other lucrative, high profile positions, not about walking away with a mealy-mouthed apology or self-exculpatory explanation but about taking responsibility for what happens when you are in charge?

For all the management books, courses, training, policies and procedures which infest corporate and public life these days, too many people in positions of responsibility behave as if they do not understand this fundamental fact. Too many behave like small children coming up with implausible stories for why their behaviour should be excused. Or think that somehow it has nothing to do with them. Too many don’t care because they know they will be indulged and get their sweeties no matter what. We wonder why the performance of so many of our institutions and services and companies is really rather mediocre. Is this any surprise when the tone from the top is, too often, “nothing to do with me” and “let me get out while the going’s good”?

There has been much talk lately of why we should not honour bad people from the 18th century because our values are better now. Quite right. But we have not moved on quite as much as we might think. The way those at the top seem to move smoothly from sinecure to sinecure, being showered with baubles en route, certainly has an 18th century vibe. Perhaps we could adopt another 18th century practice and sack – rather than reward – a few of these poor performers pour encourager les autres?


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