To the G20: The answers are to be found in Scotland
There are many things that are unique and different in Scotland.
This was not always appreciated by the world, particularly across the Atlantic where you may be forgiven for thinking it could be the next Donald Trump resort.
In fact it’s a wild and wonderful country which has over the centuries led the way in banking and financial innovation. The Scots have made their presence felt in the financial services sector on this island for over 300 years now. Even today the national character is positively associated with thrift, prudence and caution.
The Royal Bank of Scotland became the first bank in the world to offer an overdraft in 1728. Scottish banks still retain the right to issue their own banknotes which are widely circulated and may be used as a means of payment throughout Scotland and the rest of the United Kingdom; although they do not have the status of legal tender, but rather promissory notes. Unfortunately in a cruel twist of irony both their large banks, Royal Bank of Scotland (chartered 1727) and the Bank of Scotland (established 1695) have effectively been nationalised with taxpayer support as a result of the financial crisis. The "promise" was spectacularly broken were it not for the Bank of England’s intervention.
Then there is the Institute of Chartered Accountants of Scotland (ICAS). Did you know it was the world’s first professional body of accountants, receiving its Royal Charter in 1854 and was the first to adopt the designation "Chartered Accountant" and the designatory letters "CA". As a CA(South Africa), not only do I have plenty of friends in the stalls of Murrayfield, but I also share the sense of ICAS history having qualified as a Chartered Accountant (SA) myself over 17 years ago. These ancient roots bind me to a place 6,000 miles from the country of my birth.
All of this history came together for me personally when Harvey Nash co-sponsored an excellent BBC IR Society event "The Inside Story of the Economic Crisis’ with Robert Peston and Douglas Fraser. Douglas is the Business Editor for BBC Scotland and of course all BBC viewers will be acquainted with its current superstar journalist, Robert Peston. The event was professionally chaired by the Chief Executive of the Institute of Chartered Accountants of Scotland, Anton Colella. The IR Society and Tayburn Corporate Reporting were appropriately supporting the corporate governance agenda.
But it hasn’t been a good week since then. This nation’s image has been hurt with the collapse of the Dunfermline, Scotland’s largest building society and the violence against the Royal Bank of Scotland branch in the City of London. All this on the day the leaders of the world’s most important nations came to London.
This got me thinking as the G20 protest march passed in front of our Mayfair offices. The challenge facing the G20 today is not really the future of Anglo-Saxon capitalism. The really big issue is that in spite of Brown and Obama’s rhetoric - no doubt positioned carefully to stop the French from leaving prematurely - the debate needs to focus on corporate behaviour and values. Robert Peston certainly understands what created the crisis, he has won awards for describing the unfolding drama but what does he think the future will look like?
How did the once great (Scottish) banks with pages of award winning governance jargon collapse so spectacularly, and how do bankers all over the world who have received generous bonuses and pensions find redemption and salvation amidst the failure and chaos.
The answer may be closer to home than we think. Presbyterianism, another Scottish institution, places great importance upon education and life-long learning, generally considering that the point of such learning is to enable one to put one’s faith into practice. Apparently Presbyterians generally exhibit their faith in action as well as words, by generosity, hospitality, and the constant pursuit of social justice and reform according to Wikipedia.
Let’s learn from this crisis. And let’s reject a failed box ticking approach to governance in favour of leadership with strong character and personal values. We can no longer avoid the moral question.
We may even find ourselves back in a spiritual Scotland of the past, the Reformation. Where sound judgment, thrift, prudence and putting one’s faith into action in the interests of a broader agenda for social justice was the norm.
That may be the very place, for the banker, the politician, the hedge fund manager, or even the modern CEO, to find salvation.
Click on Robert Peston’s "million hits a day" blog to get the inside track on the G20 and the financial crisis as it unfolds. www.bbc.co.uk/blogs/thereporters/robertpeston/
April 1, 2009 04:27 PM | Permalink
