ALEX BRUMMER: NatWest boss Rose takes on a bed of nettles
The biggest test for the CEO of any large corporation is how he handles a crisis. As Dame Alison Rose has learned to her cost, an imbroglio can happen in the least expected part of the empire.
Private banks like Coutts are chosen for their discretion, which is why the late Queen Elizabeth II entrusted the bank with her money, as did sports stars like Marcus Rashford.
One cannot imagine C Hoare & Co, the most exclusive of private banks, allowing a dispute with a high-profile client with a similar status to Nigel Farage by behaving as callously as Coutts.
Bathing the bench in the softly focused image of LGBTQ, climate change and Black Lives Matter is in step with the times.
But applying these values and making political judgments about clients in a free and open society is entirely different.
Under Pressure: As Dame Alison Rose has learned to her own expense, a mess can happen in the least expected part of the empire.
Rose isn’t the only CEO to face unexpected calamities in recent weeks. On ITV, Carolyn McCall found herself in the spotlight for how the broadcaster handled uncomfortable revelations about presenter Phillip Schofield. Faced with hostile headlines, share price pressure and a House of Commons hearing, McCall acted decisively, ordering an independent lawyer, Jane Mulcahy, to investigate all the facts.
That put out the fire even if the stock price remains disappointing. At Thames Water, chief executive Sarah Bentley, faced with an existential event at the country’s largest water utility, resigned with immediate effect. She recognized that others might be better suited to organize a rescue.
So what about Rose, CEO of NatWest, which owns Coutts? There have been several slip-ups. The suspicion that she may have discussed a Coutts client account with a BBC business reporter at a charity dinner is itself a potential problem.
I was personally incensed (many years ago) when Clive Cowdery, at the time the boss of Resolution insurer, took the detail of my endowment policy with the group out of his pocket.
It showed that performance had not been affected by various ownership changes. However, it was an inappropriate intrusion into my personal finances.
Rather than deal with Farage’s public claims about Coutts’ behavior immediately, Rose, who has a phalanx of communications advisers, delayed until he had no choice, under pressure to do something.
His public letter to Farage, delivered late in the day, did something weird and apologized “for deeply inappropriate comments” about the former Ukip leader. Businesses avoid asking for forgiveness in case it exposes them to legal redress.
One of his predecessors at NatWest, Fred Goodwin, has never been held responsible for the bankruptcy of NatWest’s owner, the Royal Bank of Scotland, and the largest bailout in modern times. The scar, in the form of the UK taxpayer’s 38.6 per cent shareholding, is still there. If anything, Farage’s rude response made Rose look better.
However, your letter raises many questions. More significantly, his offer of ‘NatWest banking arrangements’, rather than account restoration at Coutts, implies that Farage no longer qualifies. This is all a bit mysterious. One would expect, under normal practice, that a bank would allow customers some leeway if an account became temporarily delinquent or did not qualify for the services of a dedicated bank.
The biggest mistake is Rose’s decision to order an internal review at Coutts, which he reports to the CEO.
That may sound laudable, but it’s a case of the boss setting her own homework and disregarding Rose’s role or that of the main board headed by veteran City regulator and thinker Sir Howard Davies.
Independent investigations deepen and broaden the distribution of responsibility for errors and how the best processes are reformed.
One might have expected the board or its top outside advisers to recommend such a course.
As CEO, Rose must take responsibility for botched responses, an unnecessary public spat and a failure to curb critical enthusiasm at Coutts.
But the broader context is that it has normalized NatWest and refocused on its role as a lender to small and medium-sized businesses. It would be a shame if Farage’s banana skin cost the CEO a job she has carried out with reassuring confidence.
