This article reflects the opinions of its author and not necessarily those of ShareSoc.
Farage Fiasco forces CEO’s resignation; governance concerns at NatWest
Dame Alison Rose stood down in July over the closure of Nigel Farage’s account by Coutts & Co, and more specifically over her indiscrete communications with the BBC on the matter.
Alison Rose clearly made a huge blunder in chatting to Simon Jack, the BBC news editor, about a customer’s personal financial information. I’m sure she will kick herself until the end of time for this moment of muppetry, and regret not going home on 3rd July and putting her PJs on to watch bad telly instead.
I think that to err is human, and she was let down by her team. There is surely a huge difference between arrogant, blatant liars who wilfully bend every rule in sight, and someone whose suffers a momentary lapse in judgement. She was, arguably, an experienced pair of hands doing a good job at a time of huge instability and it’s a shame she’s gone.
But the Farage/Rose fiasco is a sign that the culture issues at RBS / NatWest have not been properly addressed. RBS was a hugely arrogant company that failed to engage with, or even listen to, its shareholders. It overpaid hugely for ABN Amro. It paid huge litigation fines for numerous scandals but insisted that nothing was wrong. It continues to argue that the GRG scandal is a mere peccadillo. It challenged and refused ShareSoc’s shareholder resolutions. The recent fiasco shows that this toxic culture lives on.
Background to Royal Bank of Scotland (RBS) (now NatWest plc)
RBS’s historical performance is dire. Since 2007, long-term investors have lost 95% of the value of their investment, largely due to failures in corporate governance. Nat West today remains 39% owned by the Government via UKGI, so its governance affects us all.
ShareSoc has always advocated the implementation of Shareholder Committees. This initiative received strong support in November 2016 in the Government’s Green Paper on Corporate Governance, and in the form of Chris Philp M.P.’s September 2016 paper entitled Restoring Responsible Ownership. The primary role of the Shareholder Committee is to improve the agency model of corporate governance by increasing the engagement and oversight of Shareholders in the operation of the companies owned by them
In 2016, ShareSoc decided to focus on RBS as a complex enterprise whose governance would benefit from the adoption of a Shareholder Committee. ShareSoc paused the RBS Shareholder Committee campaign in 2019, on the basis that RBS appeared to be engaging with individual shareholders and had announced a programme of 4 events a year specifically focussed on engagement with individual shareholders.
Perhaps it is time to review that decision?
Cliff Weight, ShareSoc Member
DISCLOSURE: The author holds shares in Nat West. He does not have a short position in Nat West.