I have often thought that accountability is a term that executives love to brandish but yet which somehow do not seem to think applies to them. In 1992 when the company I worked for got into difficulties and had to be bailed out, most of the staff who were let go were awarded severance packages in line with legal requirements. Yet the CEO who oversaw the corporate failure was awarded a severance package that included the equivalent of a full salary for the 7 years until he would have retired.
He was also subsequently re-hired as a consultant. Now, maybe that was justified on the grounds that he had learned a lesson and would now be a better, more rounded professional. Let’s be generous and give him the benefit of the doubt.
Yet in total the story is just wrong. He was actually better off than he would have been if the company he led had not failed and he had kept his job!! There definitely seems to be a different law for the guys at the top of corporations and they do not seem suffer the same consequences as the rest of us.
I watched with some horror as this situation was repeated at the major financial institutions recently. Despite the big companies needing massive bailouts by the tax-payer because they were “too big to fail”, very few of the culprits at the top of these companies appeared to suffer any significant consequences. Take the case of Eric Daniels at Lloyds TSB. He not only kept his job, but is about to take a £2 million bonus before he heads off into retirement.
You cannot blame him: he is “entitled” to it and has waived similar amounts for the past two years. To give up over £4 million is one thing, but who in their right mind would expect him to make it £6 million? Especially when the bank is once again making profits. Going into retirement as he is, he would probably have to be a saint to forego it again. Yet the bank is still 41% owned by the tax-payer – who is being hit on all sides by the aftermath of the crisis that Mr Daniels and his ilk all contributed significantly to creating.
Then this past week I read a 2010 blog by Margaret Heffernan that talked about BP’s monstrous safety record. In 2005 15 people died and 170 were injured in an explosion in their Texas oil refinery. The company paid a $50 million fine to avoid criminal charges. Yet there were no consequences for any of the executives. The CEO Lord Browne retired early, but that was prompted by other circumstances which had damaged his reputation. Yet in 2009 BP apparently still faced 439 outstanding safety violations. And even after the Deep Horizon Oil Rig Disaster Tony Hayward only resigned because he was a PR disaster.
No, it definitely looks as different standards of accountability apply to people in high positions. But there are two questions that just have to be asked.
- How did we allow this to happen?
- Why have we done nothing to stop it?
Certainly, we will never be able to protect our planet if we cannot protect ourselves from those in authority who wield the commercial power. And unfortunately a few tree-hugging activists – even if they are morally right – won’t make any difference. We need new systems.
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This blog is one of several that I write, but is not regular and I only post to it when current events prompt me to make a comment and invite yours. I do hope you will contribute to the discussion and thus help to initiate and bring about the change that is so badly needed. Please click on the link on the top right of your screen to subscribe to a feed. My primary blog is my business one at Zealise but you can also connect to me at Facebook or Twitter