Ethical banking

March 7 2018

The banning of the Reverend Flowers – see here – is no surprise, though the reasons perhaps are.   His total unfitness for his role should perhaps have been as much of a consideration as his questionable moral compass and extra-curricular hobbies.  Still, it is a reminder that due diligence – real due diligence not the cursory box-ticking which it too often is – is essential before any hire.  A lesson the FCA might also have learned given its own less than glorious role in the sorry affair – see here.  Another inquiry into the Co-operative Bank is now on its way.  Will it tell us much more than the 2014 Kelly Review which concluded that “There was a pervasive lack of realism about the underlying strength of the business, partly arising out of a belief that as an ethical bank it was doing the right things…..”?  Paradoxically, a belief that you are a good person or good organisation can lead to a dangerous complacency.  It’s not what you call yourself that matters; it’s what you do.

And one of the most important things you can do is to hire the right people into an organisation.   As Warren Buffet put it – “You look for three qualities: integrity, intelligence and energy.  And if you don’t have the first, the other two will kill you.”