Fred Goodwin made me redundant – a Procurement Director’s story

I have no time for SIR Fred Goodwin - I was Group Procurement Director at NatWest when his firm, RBS, who were only a third of our size, took us over in 2000.  An interesting experience, although within NatWest we were more anti Bank of Scotland, who made the initial bid; RBS presented themselves as being much more friendly towards NatWest generally.

Fred Goodwin giving the order to fire me...

I didn't want to move to Scotland, so turned down the chance of being considered for the CPO role in the expanded organisation. I took the redundancy package; considerably more money than I'd ever seen before in one place, for doing nothing, which seemed a little morally weird..  But hey, I'm not complaining. I didn't ask to be taken over and moved to Scotland, and it  paid off a good chunk of the mortgage.

And RBS got the benefit of a business (NatWest) that was far stronger than the City and media had realised. Basically, the City had taken against us generally and Derek Wanless (the CEO) personally, we then made an ill-judged move to acquire Legal & General, and that was it.  We were doomed from that point. RBS did make some good moves, and were operationally a lot more cost focused than NatWest, but NatWest provided the solid, profitable basis from which Goodwin could take on the world.

Me, hearing about my redundancy payout

I heard stories privately over the subsequent years that suggested hubris and arrogance might be getting to Goodwin (but no, I didn't sell my shares..) The new palatial head office, changes made at huge expense because Goodwin didn't like the colour of the carpets, the size of his desk.. some stories may have been apocryphal, but it was clear that the ascetic cost-cutter that he was in the early days had been superseded by a somewhat different approach.

And then, in the crash of 2008, when RBS almost collapsed and the UK Government stepped in, I lost a substantial sum of money I still had tied up in RBS shares - in an ironic twist, pretty much exactly what I'd got as my pay-off a few years earlier.

So all in all, you might expect me to be pleased about the withdrawal of his knighthood.

But.. I'm not. It just seems a very strange principle. If he "deserved" his knighthood in 2004 when he was awarded it (and no-one seemed to object too much then), but something he has done since then means he hasn't lived up to that billing, then where do you draw the line on that principle?

Do we strip Sir Bruce Forsythe of his when he stops being "entertaining"?  Or Sir John Gielgud for some of his his final dodgy film roles? How about Sir Steve Redgrave - hasn't won any gold medals for a few years now, has he?

But more seriously perhaps, what about Ministers or civil servants whose decisions around Government projects and procurements turn out to be bad ones in retrospect. They can cost the taxpayer huge sums of money, up in the £ Billions - and my goodness, I can think of a few of those projects. Aircraft Carriers, ID Cards, Fire Control Centres, NHS IT...  I can name 4 knighted civil servants straight off who on that principle should take the same medicine as Sir Fred.

And what about further down the ladder? The young MBE charity worker who becomes a pole-dancer? The CBE head-teacher who becomes a miserable old man, making his neighbours lives a misery?  The OBE doctor who dumps the NHS and makes a fortune from private practice? Do they all get stripped of their honours?

Goodwin hasn't been prosecuted. He did nothing illegal (according to those who looked into such matters). He made some big, costly mistakes, just like the people involved with those public procurement disasters.

So this looks, at heart, like mob rule at its worst, with a bit of political calculation on the side.

Now I might well choose to be part of that mob, lobbing metaphorical rocks at Goodwin given half a chance, but that doesn't make it right. And I don't think this whole episode shows us in a good light, or is a positive way for the UK to be headed.

 

Voices (7)

  1. VegasChild:

    You think Bruce Forsythe is entertaining?

  2. J Day:

    Here is what you omitted to say – SIR Derek Wanless should also have his honour removed.

    It was under the Wanless stewardship that NatWest’s stock value was decimated. The Legal and General deal was the metaphorical straw that broke NatWest’s back, although several strategic misjudgments were made by Wanless prior to this, and the concatenation effect proved fatal. Had Wanless managed NatWest better, it would never have fallen prey to Fred Goodwin, and how different the World and our wallets would look today. You really need to be a tad more dispassionate.

    Of course, some may say that Wanless was unlucky. To them, I would retort that he was also unlucky at Northern Rock Bank then, which is stretching credulity. Wanless limped off to Northern Rock after being ousted from NatWest. When Northern Rock had its fateful ‘run’, and subsequent nationalisation, Wanless was on the bank’s board. He was a senior Non-Executive Director of 7 years standing, and, very crucially, was head of the bank’s Risk and Audit Committee. Wanless also sat on the Remuneration Committee which incentivised Adam Applegarth with unbridled riches to continue his empire building on sand, all with seeming impunity from the costs of failure.

    The investigating All Party Commons Treasury Select Committee singled Wanless out for criticism, for his imprudent and woeful performance at Northern Rock. Another back door departure duly followed. So, that’s two banks and two oustings for failure – a coincidence ?

    Should we look to the Wanless NHS Funding Report for Knightly justification ? I would stop you there also. Blair had already committed the Chancellor to Euro level NHS funding, and Gordon Brown merely needed a stooge to sign off his reverse engineered report. Sadly, that Wanless NHS Report was the catalyst for prodigious profligacy, and largely went into creating millionaire GP’s, Consultants and NHS Mandarins. Ask the Nurses and NHS procurement staff how much of Wanless’s recommended billions they saw !

    So, yes, I am more than happy to see the hubristic Goodwin lose his silly gong, for his multi-billion pound legacy to the taxpayer. Equally though, I have to wonder why Wanless, who had his finger in all the bad pies that cost billions, has retained his rather meaningless trinket.

    In my eyes it is now plain Fred and plain Delboy.

  3. bitter and twisted:

    My inner Stalinist says: liquidate him for economic sabotage.

  4. Huhh?:

    It’s time we disbanded the whole outmoded process of “honours”. We no longer live in an absolute monachist state and are on the cusp of reform of the lords (long overdue) – so what’s the point of the systems anymore?

    Seems now to be more about being a way for successive governments to award cronies/financial contributors (which one was Fred?) and to generate populist feel-good headlines – I mean why does David Beckham with his millions really need a little medal to pin on the wrong side of his million pound armani suits?

    The recent trend of award those who do sterling work in the community is always overshadowed by the awards to undererving tw*ts.

    Scrap the whole thing. That would save a bit.

  5. David Atkinson:

    It was right that Fred got shredded and others with similar lamentable records should be dis-honoured as well.

    Perhaps it this happened nmore often, those with aspirations of being honoured in the future (senior civil servants, business leaders, etc.) might be advised to make better decisions with sustained performance much more in mind.

    We might then see fewer grandstanding/vanity projects and more attention payed to realistic, data-supported ROI calculations.

    Can’t wait for the avalanche of Olympics and HS2 honours, regardless of performance, cost, value…..

  6. John Viner-Smith:

    I would be very interested to see just how much this whole side-show has cost the public purse.

    I heard mention on the Today show this morning of a 500 page FSA report as well as the convening of the now near-mythical “Forfeiture Committee”. It wouldn’t surprise me if this exercise in pandering to the mob, as diverting as it has been, didn’t come with a six figure bill once the various inputs and expenses have been tallied.

    In this new “…age of austerity” that can only be viewed as a shocking waste of money, throwing good money after bad.

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