Posts Categorized: Leadership
A Toxic Culture?
February 14 2020
In March 2017 PC Keith Palmer was killed while defending Parliament from a terrorist. In August 2019 PC Andrew Harper was killed while investigating a suspected burglary. These are only 2 of the 50 police officers killed between 1990-2010. Few of us face the risks ordinary police officers run. This does not excuse what is set out below. It does explain why it is so necessary, if their work and sacrifices are to be worthwhile and the public gets the policing it is entitled to, that the issues raised below be properly addressed.
What follows is not a comprehensive list of every scandal affecting the police. But it is an overview of their range over five decades.
- 1972-1977: Sir Robert Mark’s campaign to root out corrupt officers within the Flying Squad and CID, resulting in more than 500 officers being dismissed or “resigned”. He memorably stated: “a good police force is one that catches more crooks than it employs”.
- 1974-1989: The West Midlands Serious Crime Squad – eventually wound up after allegations of incompetence, malpractice and abuse of power, leading to over 100 cases collapsing or being overturned on appeal. An investigation into its activities led to some disciplinary action but no prosecutions, a decision for which the DPP (Barbara Mills) was severely criticised.
- 1970’s: The activities of various police forces in the Irish miscarriage of justice cases – the Guildford Four (1974), the Birmingham Six (1975), the Maguire Seven (1976).
- 1978-1982: Operation Countryman – an investigation into corruption within the Met and City of London Police in the late 1970’s. Information was released in 2018 about efforts made by the Met and the DPP (Sir Thomas Hetherington) to cover up the scale of wrongdoing and obstruct the investigation by the Hampshire and Dorset police.
- 1979: The death of Blair Peach during an Anti-Nazi League demonstration against the National Front in Southall. In 2010 a police report stated it was likely that a Metropolitan Police officer “struck the fatal blow” and attributed “grave suspicion” to one unnamed officer, who may also have been involved in a cover-up with two colleagues.
- 1981: Operation Swamp, the subsequent Brixton riots and the Scarman report into how the police used their “stop and search” and other powers. Numerous recommendations were made.
- 1980’s – 2010: South Yorkshire Police’s failures in the Rotherham child exploitation scandal. The Jay Report described how the police failed to investigate adequately or at all the reports they were receiving over at least a decade of child sexual grooming.
- 1989: The Hillsborough stadium tragedy. Two reports – the 1990 Taylor Report and the 2012 report by the Independent Panel – described the extent of South Yorkshire Police’s negligence, attempts to shift blame on others and pervert the course of justice.
- 1993: The investigation into Stephen Lawrence’s murder and the resulting 1999 Macpherson Inquiry which found that many Scarman recommendations had not been implemented. Macpherson, unlike Scarman, described the police as “institutionally racist”. Subsequently it was revealed the police had spied on the Lawrence family.
- 2003-2020: The failures of the Greater Manchester Police in relation to Operation Augusta and child sexual exploitation, described in the Newsam report published this week. The report’s statement that: “The authorities knew many were being subjected to the most profound abuse and exploitation but did not protect them from the perpetrators. This is a depressingly familiar picture and has been seen in many other towns and cities across the country.” could apply to a number of places and police forces round the country.
- 2006-2011: Allegations were made during the News International inquiry that the police were selling confidential information to journalists. This was to be looked at in the second stage of the Leveson Inquiry which never went ahead.
- 2009: The death of newspaper seller, Ian Tomlinson, as a result of police assault during G-20 summit protests.
- 2011: It’s revealed that various undercover policemen had infiltrated environmental groups for a number of years, entering into deceitful relationships with activists and fathering children. In 2015 the Met apologized to women “tricked into relationships” over 25 years, closed the units and made financial settlements of circa £3 million. An “Undercover Policing Inquiry” into “appalling practices” in undercover policing was set up. It has yet to report.
- 2012 onwards: Cleveland Police has 5 Chief Constables in 6 years, the first in this list being dismissed for deceit and misconduct. In 2019 it is put into special measures following an independent report describing it as “inadequate” in all fields, “directionless, rudderless and clueless”, “putting the public at risk” with some officers “not acting with honesty, integrity and competence“.
- 2014: Operation Midland into child abuse allegations made by Carl Beech against politicians and others is launched. In 2019 following his conviction on multiple counts of perverting the course of justice, the Henriques Report identifies extensive failings in the original investigation.
- 2015: Police Scotland are criticised by a judge for breaching data privacy laws and the ECHR when spying on journalists and their communications with their sources. Similar breaches were committed by Cleveland Police.
- 2018: The Met’s anti-corruption unit is under investigation for corruption in relation to allegations of assault, racism, child abuse and child grooming.
- 2018: Cliff Richard is paid £400,000 by the South Yorkshire Police for its behaviour over the raid on his home in relation to historic child sex abuse allegations, including informing the BBC about the raid.
- 2005 to date: there have been 4 Metropolitan Police Commissioners. Ian Blair resigned after falling out with the London Mayor; his successor resigned because of his links with one of the journalists implicated in phone hacking; Hogan-Howe lasted 6 years. Under his leadership Operation Midland is set up and people arrested under Operation Yewtree and bailed for lengthy periods without charge, a practice later banned. His replacement in 2017 is Cressida Dick, the senior policewoman in charge when a blameless electrician was killed in 2005 following terror attacks.
- 2020: The Met refers itself to the police watchdog for its failure to act on recommendations made by Sir Richard Henriques to investigate two others for perverting the course of justice in relation to abuse allegations arising from Operation Midland.
- 2020: A review led by a former Met Police Commissioner states that the police are unable to deal with a huge increase in fraud cases.
- 2020: This month a report by HMICFRS on all 43 police forces states that the public has lost faith, having “rumbled” that the police are unable to investigate most crimes. The charging rate in the year to March 2019 fell to 7.8% of all reported crimes in England and Wales.
It is a dismal list. It could be twice as long.
To a financial investigator, this picture is very familiar. Despite innumerable inquiries, changes in the law, disciplinary proceedings, recommendations, new procedures, training, apologies, compensation paid, some prosecutions and that perennial favourite – “lessons have been learnt” – bad, criminal behaviour (which all the people doing it would clearly have known was wrong) and incompetence have repeatedly occurred in forces all over the country over decades. Not one or two “rotten apples”; whole orchards of them. There has been a culture of poor leadership, cover-up or the truth only coming out many years later and of other key agencies turning a blind eye, aiding and abetting or failing to set or demand high standards of probity and professionalism.
Above all, there has been a failure to ask why such problems keep on happening, despite all the remedial steps taken and all the apparent learning of all those lessons.
It is irrelevant that there are many policemen, possibly even the majority, who don’t behave in this way. The same could be said of banking. The professionalism, hard work and good name of the honest good guys are tarnished by the bad, useless ones. The bad drive out – and demoralise – the good.
Policing depends on consent. Trust is essential to that consent. Scandals and incompetence erode that trust. How can our cherished system of policing work then?
Perhaps – like banking – it is time to realise that there is something systemic and deep-rooted and toxic in police culture which allows or encourages or does not stop officers from behaving badly. Perhaps – like banking – it is time to make the hard cultural changes needed if training and rules are to work. Perhaps – unlike banking – it is time for senior leaders to take real responsibility not merely talk about it. Perhaps – like banking – it is time to realise that even successful or vital sectors or professions can in reality be really rather more second-rate than we like to pretend. Perhaps we should stop deluding ourselves that our key institutions are as good as we sometimes rather vaingloriously claim. The police are not the only body of which this could be said, of course.
Law and order are the most basic functions of the state. But the police should not be treated as a sacred cow. A comprehensive, dispassionate and ruthless look at how the police operate and real tough action to change it for the better are needed.
What are the chances?
Back to Basics
July 30 2019
Ever since the financial crisis started there has been a plethora of explanations about why traders and bankers behaved as they did. Some have been purely descriptive: what happened and when, allowing us to marvel at the folly of it all, at least in hindsight. At the time these clever financiers were praised by pretty much everyone from Chancellors down. There were very few pointing out at the time that the Emperor had no clothes.
But increasingly there have been attempts to use the insights gleaned from other disciplines to explain why what happened in the way it did. The latest neuroscientific findings were used to describe the biology of boom and bust (The Hour Between Dog and Wolf, for instance). Behavioural economics has had its say, as has nudge theory. Rather than nudging people to behave well, all the payment and reward incentives nudged financiers into doing what suited them financially irrespective of the effect on the customer and no matter what the expressed good intentions of the firm were. Goodness! Whoever could have predicted that, without a theory to explain it.
Psychologists have had their say, of course, though only a cynic might wonder about how much actual knowledge about the realities of life in the financial sector they have. No matter: all could opine merrily on the importance of culture in finance and on all the wonderful insights that these disciplines could bring to those seeking to manage and regulate the financial sector.
And now the anthropologists have got in on the act, as in this article by Gillian Tett. In it she points out how anthropologists have tried to analyse the cultural patterns, the rituals and symbols, even the words people use in finance to understand what was going on under the surface. In truth, the insights brought by anthropologists (at least as described here) are pretty obvious rather than thought-provoking; the article does not need them to be worth reading.
What is interesting, though, is how commentators on finance and perhaps also regulators are, perhaps unconsciously, making the same mistake as many of those traders and bankers. They are over-complicating, coming up with all sorts of theories and hypotheses apparently grounded in science or other social studies, described and interpreted by experts, using technical language to describe common human behaviours. Just as too many traders developed over-complicated products which they only half-understood and managers kidded themselves into believing that they had found a foolproof solution to valuation or risk management or any of the other difficult tasks they had, so there is a risk of developing overly complex explanations for why so many people behaved so stupidly or worse. The risk is that the more complex the explanation, the more people feel that it is all too difficult really to do anything about it or that this is something best left to the culture specialists, psychologists and other “ologists“.
Keep it simple might be the motto. In the end, by whatever means the conclusions are reached, what everyone in finance needs to remember is this:-
- Trust is at the heart of finance.
- Everyone in a financial institution is, in one way or another, managing risk. There is no such thing as a risk-free product or institution. Or, indeed, individual. Understanding the risk you are running and managing it properly is what every bank, every employee in a bank, every customer of a bank, every shareholder in a bank, every investor in a financial product and every regulator of a bank is doing. Or ought to be doing.
- Understanding properly is hard work. There is no magic bullet, algorithm, theory, process, spreadsheet, AI or killer piece of management information which will do it for you. Thinking is often required.
- There is no way of eliminating risk. Mitigating and minimising it: yes. Eliminating it: no. If anyone says otherwise (and much of the financial crisis was caused as a result of clever people thinking they had done just this and learning, painfully, that they hadn’t) they’re a charlatan or worse.
- Human beings, even clever ones (particularly them, it sometimes seems) do not behave rationally around money. Money and emotions are bosom pals. As any decent novelist or lawyer dealing with divorces or wills will tell you. The “animal spirits” Keynes described do not just apply to market participants but to all of us.
- Managing people, understanding them, motivating them, inspiring and leading them, teaching them, setting them a good example, setting them high expectations and making it clear what the boundaries are, what behaviour will not be accepted, what crosses the line, helping them get past their frailties, working effectively with them is hard work, the hardest work anyone ever has to do. And by far the most valuable – and rewarding.
- Finance is there to serve others, not itself. It is a means to an end and the moment it (and the people in it) start thinking of themselves as indispensable, as set apart from the society they are part of, as entitled to special consideration and immunity from challenge is the moment when hubris sets in. Nemesis will surely follow.
Here We Go Again
February 28 2019
One of the financial sector’s characteristics is a short memory. After about 5-7 years memories, particularly of tough times, begin to fade. New joiners bring their enthusiasm and keenness to do new deals, develop new structures, explore new possibilities. Blockchains, ever more complex algorithms, AI, new paradigms: all are being created and expanded. The future’s exciting. So the surfeit of scandals which came to light following the financial crisis a decade ago are beginning to sound like stories from a forgotten age, interesting but no longer really relevant to now, let alone the bright new future.
And then, from the other side of the world, comes this – a searing report (a Royal Commission, no less) into misbehaviour in Australian banks, to remind us, once again, that – in the words of an official with the US’s Financial Crimes Enforcement Network back in 2013 – “large amounts of money sometimes bring out the worst in people.”
(As an Australian might put it: “You don’t say!”)
The report followed a year-long public inquiry into the culture and practices within Australian banking and revealed shocking, widespread and systemic examples of the sort of misbehaviour with which we have become so familiar.
- Rewards for misconduct: the focus of all the institutions, whether banks, mortgage brokers, insurance firms, intermediaries was on selling, as much as possible for as high a fee as possible, regardless whether this was in the customer’s best interests. In some cases, non-existent services were provided to dead people for years.
- It will come as no surprise that this arose from badly skewed incentives. Or greed, of both the individuals and the institutions, as the Report says, bluntly and refreshingly.
- Firms abused their superior knowledge to mislead and defraud customers. Conflicts of interest were ignored. Individuals did what they could not what they should.
- When customers complained, staff were trained to lie to them, even when compensation was paid; deliberate actions were conveniently and misleadingly described as an “administrative error”.
- Firms lied to and misled regulators, often for years on end. Nor were these the actions of junior staff but of senior management who felt no compunction about noting down in internal correspondence how to keep information from regulators and prevent any proper scrutiny of their actions.
- Regulators were weak and did not hold those who misbehaved to account, even when they became aware of them.
500 pages set out in blistering detail a sorry tale of greed, fraud, lies, poor leadership, contempt for customers and a systematically rotten culture. The usual action is, of course, now being taken: resignations, new leadership, building a good culture, training, new legislation, enforcement, litigation and so forth.
Two points in particular are worth noting:
- These scandals did not happen in investment banking but in retail institutions, those dealing every day with ordinary consumers, the very people who need trustworthy and reliable financial services, who had a right to trust their providers and who were so badly let down.
- The banking sector in Australia is one of the most profitable in the world: 2.9% of Australia’s GDP. Compare this to the US share of 1.2% and 0.9% in the UK. The pre-tax profits of Australia’s banks are 6thin the world even though it is only the world’s 13th largest economy and its population only 25 million. Little wonder that they thought they could do no wrong.
When sectors / institutions start thinking of themselves as indispensable (“look at our profits, our tax revenues”), when finance forgets that it is a service industry, there to serve others not itself, when banking is seen as a product to be sold rather than as a long-term relationship to be nurtured, then hubris and the sorts of behaviours seen in Australia, as well as elsewhere, will happen.
The Australian report is a salutary reminder that the old stories still have much to teach us.