Alison Rose’s position at NatWest was untenable
after Nigel Farage row. She had to go
Nils
Pratley
In
discussing his relationship with bank and Coutts subsidiary she breached
group’s policy
Wed 26 Jul
2023 09.20 BST
This is how
NatWest Group describes its policy on protecting privacy and customer
confidentiality. “We see privacy as a vital component to achieving our purpose
and [it] is therefore embedded across all parts of our business,” it starts,
adding that “anyone breaching the policy can be subject to disciplinary
action”.
It
continues: “All our customers, colleagues and third parties can therefore be
confident that we treat protection of their data with the utmost seriousness.”
And it concludes: “Updates and reminders are also provided through internal
communications to ensure privacy is at the forefront of all of our colleagues’
minds.”
All banks
have similar policies and NatWest’s version is a critical prism through which
to view the former chief executive Dame Alison Rose’s “serious error of
judgment” – her words on Tuesday hours before she resigned – in discussing
Nigel Farage’s relationship with the bank and its Coutts subsidiary. She
breached a policy that NatWest tells its staff, in unambiguous terms, must not
be breached. The policy applies, needless to say, even if you find the client’s
views loathsome.
Rose’s
compounding error was that she had not got her facts straight when talking to
the BBC’s business editor, Simon Jack, early this month. It turned out that
Coutts didn’t drop Farage solely because he had fallen below the qualifying
criteria to be a client. Its reputational risk committee had also deemed him to
be unwanted, or too risky, because his views “were at odds with our position as
an inclusive organisation”.
Rose
maintained she didn’t reveal any personal financial information to Jack but
that is hard to square with her admission that she recognised that she left the
reporter “with the impression that the decision to close Mr Farage’s account
was solely a commercial one” – in other words, based on financial criteria
alone. It sounded like dancing on the head of a pin. What’s more, if the BBC’s
version of events is correct, Rose was given the chance the day after the
fateful conversation to retract the story and still an alarm bell didn’t ring.
Can Rose
say in all honesty that she would have looked leniently on a NatWest employee
in similar circumstances? And could the board of NatWest claim the same?
Unlikely.
That is the
central point in the latest chapter of this bizarre tale. The wider affair has
many layers – such as banks’ obligation to treat customers fairly if they wish
to close accounts – but the angle specific to Rose was about confidentiality.
If NatWest’s privacy policy is as strict as it is presented, it has to be seen
to apply to all employees. A junior member of staff would expect to lose his or
her job. In expressing its “full confidence” in Rose on Tuesday evening, the
NatWest board and its chair, Sir Howard Davies, looked as if they were giving
the chief executive special treatment.
If Rose was
naive in briefing the BBC, the board of NatWest was doubly so in thinking she
could survive without the backing of the chancellor and Downing Street. When
your bank is 39% owned by the state, you have to carry political support when
the stakes are this high. It is astonishing that Davies, a former regulator and
one of the FTSE 100’s most experienced chairs, seemingly ploughed on
regardless. Rose and the board were undermined within hours by reports of
concerns from the Treasury and No 10, leading to the U-turn in the middle of
the night.
None of
which is to deny that Rose has mostly done well in her four years in the post.
In the round, NatWest looks more stable than it has done for years. Nor is
there anything wrong with banks – as long as they remember that lawful free
speech matters in a democracy – having “a purpose” if that means considering
their role in society and having regard to more than just the maximisation of profits.
Nor should
we forget that other bank bosses have survived comparable scrapes in the past.
Jes Staley at Barclays in 2018 somehow escaped with a bonus-docking penalty
(the NatWest board’s plan A for Rose) after he tried to unmask a whistleblower,
another regulatory no-no.
Yet one
still comes back to the basic point that bank bosses cannot be seen to get off
lightly if they breach rules on privacy and confidentiality that they are
supposed to enforce on others. Rose is personable, engaging and otherwise
competent. But her position was untenable. She had to go.
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