Redemption for the Royal Bank of Scotland
I have posted below an edited version of the Royal Bank of Scotland’s public statement today at its Annual General Shareholder Meeting.
I believe the words and sentiment are so striking, so honest, that we all need to pause for a minute to read them. This is not corporate marketing spin. These words represent a profound change of direction and in my view are a watershed for all business leaders to take note of. See our previous blog on "To the G20: the answers are to be found in Scotland". This is truly the place where salvation can begin.
Let me say this publicly: Harvey Nash is proud to be associated with the Royal Bank of Scotland Group (including Citizens and ABN Amro) over the last 12 years. We have enjoyed an excellent and supportive relationship through good times and bad. The RBS team who work with us are truly world class talent. Our business, its cash flows and our trading model is well understood by the bank, indeed we have turned to the Royal Bank many times for advice in all areas of banking and cash management across the world, in the US, UK and Holland.
We are therefore delighted that RBS has sent this strong message and we support the call to stop the political "football" concerning controversial pension settlements and Board squabbles. These public arguments are deeply upsetting for us as clients and we want them to stop. We recommend that the government, the Prime Minister, the Cabinet and the Treasury take proper responsibility for their failures too, and put this behind them in everybody’s interest.
We have been commenting for some time on the new generation, (Gen Y) entering the workforce. They are the future Power of Talent, employees with different values from those associated with the 20th century. They display a zero intolerance approach to bad corporate behaviour. They reject organisations which are perceived to be greedy, polluting, uncharitable, authoritarian and corrupt. We have been warning for over two years now that they will not work for companies who don’t care about these sensitive issues.
For those who do care about values, who understand Generation Y will one day fill leadership positions all over the world, there is a bright future for their employer brand equity. RBS can begin to rebuild theirs, starting today.
Here is our edited version for Blackberry’s and iPhones-
Statement by the Chairman of the Royal Bank of Scotland 3 April 2009. The full statement can be found on www.rbs.com
Talent
Many of our employees are shareholders, and our people are, of course, the heart of our Group. They share the financial pain while also having to face a difficult period in their working lives. Like too many people right now, they are worried for their jobs and have seen the reputation of their industry and profession attacked. The majority of RBS staff in the
They deserve better from their top management, and they do not deserve to share the worst of the criticisms being laid at the door of their employer and their industry.
Fault and blame
Only a tiny minority of staff in RBS were in any way responsible for the major credit market losses we suffered in 2008. It is remarkable that there were only a few hundred people responsible in the relevant segments of our businesses chiefly in the financial centers of
RBS profitable
Given the complexity of the Group and the progress of integrating the ABN AMRO businesses, it is impossible to unpick the results with complete accuracy. However, that said, our estimation is that RBS would have made an operating profit before tax and goodwill impairment in 2008. In other words I don’t think there can be any doubt that the key decision that led RBS to its difficulties was the acquisition of ABN AMRO.
Remuneration and rewards for failure
Reforms have been made as we undertake a comprehensive review of all remuneration policies in 2009. The new approach will I think be seen by most reasonable observers to have balanced the difficult conflicting issues we face. Reward will be longer term and more directly aligned to shareholder interest rather than short-term return. Our new Chief Executive has, at his own insistence, a clause in his contract ensuring that he will receive no reward if he leaves the company for reasons of his own failure.
Culture, corporate values and poor practice
We must make other changes. In particular our risk processes and aspects of our management culture must change and will.And in a more symbolic way some of the practices that were accepted at the height of a boom when the Bank was recording £10bn profits, cannot be acceptable now if indeed they ever really were.The CEO and his team are moving quickly to do what we can to demonstrate that the Company recognises its position and is changing.Would we choose Formula 1 sponsorship if we were starting from here? No.Should we retain a corporate jet? Its up for sale immediately.
The Future
I believe we should bring an end to the public flogging and focus on the good and enduring people and businesses of RBS and allow them to earn our way back to success. The past is done but this company is not. The legacy of the last year will stay with us but now is the time to look forward.
We have the foundations in place to rebuild the Group to standalone strength and everyone at RBS is committed now to doing just that.
Interesting facts about RBS
·+ 15 million
·No 1 bank for small business and corporates like Harvey Nash.
·Top 6 in the world for Foreign Exchange, Top 10 for International Bonds.
·Top 5 global transactions services provider
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·Citizens is in the Top 10 in the
·No 1 in the
April 3, 2009 12:16 PM | Permalink
