Holding power to account has turned into a bloodsport
First published in The Sunday Times on 13th August 2017.
I spoke at an annual conference for the chairmen and chairwomen of health trusts a few years ago. The view among the audience was that the gravest problem they faced was not the NHS budget, or ageing populations, or rising expectations of medical care, but being able to recruit chief executives of sufficient quality for the job. They said no one of the highest calibre wants to do that type of task any more.
Leaders of public institutions of every kind are under sustained attack. I am not just talking about criticism from the media, or citizens, or even parliament. No, the danger faced by the bosses of our most important civic and business organisations is that they could get arrested and thrown in jail.
Four directors of Barclays bank are being prosecuted for alleged crimes committed nine years ago; former police chiefs are being prosecuted over the Hillsborough football disaster 28 years ago; and no doubt several senior council executives at Kensington and Chelsea are concerned that they may face criminal charges over the Grenfell Tower fire tragedy.
Perhaps all these prosecutions are justified, despite the very long delays in some cases. Unfortunately, there is no statute of limitations for any criminal cases in the UK.
Where justice is stimulated by the mob, it feels more like retribution than fair punishment, rational deterrence or crime prevention. If we expect near perfection and all-encompassing obligations from leaders in public life, we will end up disappointed.
Part of the problem is the compulsion to find someone to blame for any disaster.
We have moved from an age of deference to an era when everyone is entitled to harass those at the top and demand sacrifices — even if there is no individual culpability.
Of course the guilty must face justice — but legal actions need to be fair and proportionate. Leadership is about constant trade-offs and difficult decisions, and well-intentioned mistakes are inevitable.
The legal burden placed on directors and officers of organisations grows ever more onerous. Meanwhile, the job becomes more complex and stakeholders more demanding. I stepped down as a director of a bank a few years ago, because it was going public and I did not want to serve on the board of a quoted bank.
The regulatory burdens on directors of banks — especially listed ones — are intolerable. More time is spent on audit, risk, governance and compliance than actually running the business.
Over the past quarter of a century, much of the best management talent has defected from the public markets. They have retreated from the brickbats about fat cats, the short termism, the earnings treadmill, the corporate governance rigmarole and activist investors. They end up running private equity-owned companies. The losers are the public, who own listed companies.
Do we want a culture led by second-raters? We complain about the quality of our MPs, but do our finest still want such a precarious career? By international standards, I believe our leadership cadre is extraordinarily honourable, be they public servants or executives running public companies.
Foreigners queue up to invest here because we already respect the rule of law and have honest administrators.
Unfortunately, overzealous regulators and prosecutors feel compelled to pursue speculative cases to justify their existence — to claim their scalps and boast of their successes.
How often are such actions actually in the national interest? How many are fuelled by armies of lawyers thirsty for huge fees? Self-righteous journalists, regulators, litigants and prosecutors are gradually undermining the very institutions they claim to protect.
Holding power to account has become a bloodsport rather than a balanced search for the truth.
In 1986, the then American president Ronald Reagan gave his greatest address, following the Challenger space shuttle disaster, in which seven astronauts died. He spoke of how brave and daring those pioneers were, and how such setbacks were part of the process of exploration and discovery.
“The future doesn’t belong to the fainthearted. It belongs to the brave.” He talked about how there would be more flights and that the quest would continue. We should follow this example and retain our spirit of adventure.
A dynamic culture is one that has sound institutions led by the most able. Such leaders take bold decisions, and are not obsessively risk-averse. If organisations become gripped by the precautionary principle because of fear of prosecution then we will stagnate, and suffer the consequences.
When compliance and lawyers dictate every move taken by every board then organisations and society suffer paralysis, and are unable to make progress.