When I was at college, much of the discussion about careers was whether you wanted to go for the ‘ks’ or the ‘k’ – a job that paid a lot of money, or a job where you would reap the rewards of public service. Fred Goodwin chose a path that gave him both sorts of k. While he has famously hung on to quite a lot of money, last week he rather publicly lost his Honour.
The media are divided. Is this a triumph of justice, or a vindictive personal attack? Will it teach bankers a lesson, or will it scare off foreign investors and impoverish the UK? I would argue that this was the right thing to do. Honours are not supposed to be like bonuses, which have become so sticky that an executive now seems to be able to claim one by right whether or not performance improves. They are supposed to be a special recognition, a national thank-you for a contribution above and beyond the call of duty. Now, every Honours list inspires headlines about probity, particularly when party donors appear on it. But for an Honour to mean anything, there has also to be dis-Honour. Whether or not Fred Goodwin deserved his honour in the first place, his judgement as Chief Executive brought his bank so low that the nation had to step in and bail it out. What once looked like genius, time has shown to be hubris. To protect the integrity of the Honours system, perhaps more honours should be taken away when hindsight shows that the original award was misplaced. And will this and the Hester bonus story ruin the UK’s reputation for business? Shame on the commentators for saying bankers – and senior managers in general – are only motivated by money. Even without the likes of Paul Sykes saying publicly that his millions are worth nothing without his happiness, data from the most recent Ashridge Management Index shows that job motivation is largely the same across the private and the public sectors, and is much more about challenge, autonomy, impact, respect and learning than about material reward. While a high basic salary enters the list at number 7 for the private sector, incentive schemes and performance-related pay trail at number 13. Of course financial reward is an index for value, but so is public recognition. It was not the government who made it difficult for Hester to accept his bonus, it was public opinion. And it was this public opinion that tried Fred Goodwin and found him wanting. They are our honours and it is right that we withdrew this one.