Didn’t Ritchie say that the Co Op should be allowed to have non-bankers running it?

I’m sue he did you know. Indeed, I’m sure he spluttered that it was absolutely appalling that the FSA should try to insist that the board actually knew something about banking. That it was the very fact that they were not bankers which would make them such good people to run the bank.

The Guardian appears to disagree:

As the politicians squabble over who got most cuddly with the Co-op Bank (short answer: all main parties saw advantages at various times), let’s stick to the basics. This scandal is first and foremost about a failure of regulation.

It was absurd that the Financial Services Authority did not insist that the Co-op Bank have a chairman who knew something about banking. And it is astonishing that the regulator thought a badly run, poorly-capitalised bank should be given a year to try to buy 631 branches from Lloyds.

Yes, the Co-op Group itself also looks ridiculous. Its system of promotion by election may have produced a form of democracy where voting power is so diffuse that the culture of the organisation has become inward-looking and self-obsessed.

The main board consists entirely of insiders. It is generally safe to run a golf club that way, but a large commercial enterprise up against competitors with better access to capital is taking a mighty risk.

That is the Co-op’s tragedy and the only silver lining in the saga of the Rev Paul Flowers is that the movement will now have to think honestly about how it is governed.

If it looks at John Lewis, an employee-owned partnership, or Nationwide building society, the Co-op will see that both successful organisations hire independent outside directors to provide sceptical views.

The penny dropped for John Lewis in 2006, when it appointed its first independent non-executives at a time of modernisation.

The Nationwide board has had a majority of independents for decades. Checks and balances in the boardroom matter and the Co-op should acquire some.

Ho hum.

7 thoughts on “Didn’t Ritchie say that the Co Op should be allowed to have non-bankers running it?”

  1. Well, of the three, Flowers obviously – OK I’m sorry, the joke doesn’t work on me. My fault probably.

    However and completely left field, the Rev Flowers does provide another demonstration on what I regard as another ugly aspect of Socialism – of the Labour movement.

    The “movement” is what counts; individuals are expendable. So those individuals are gods when they’re on the way up. Gordon Brown, Damian McBride, Tony Blair, ED MILLIBAND. All untouchable and incapable of being wrong when they’re in position; all useless idiots or worse after they fall. So the same people who called the Iraq War genocide trooped out and voted for the architect of this ‘genocide’ at the next election. One man even told me this ‘genocide’ was “a one off”. Now of course Tony hasn’t a friend in Labour. Likewise Gordon Brown. Paul Flowers hasn’t a friend in the world.

    All this fits the narrative: Socialism is historically inevitable. It cannot fail. It has been failed (rather often it seems) by idiots or lickspittle turncoats who have failed to implement it properly.
    So Co-op is indeed all about Coke and rentboys. Because it cannot, absolutely cannot, be anything to do with needing the sort of governance those capitalist vultures employ.

  2. If this is about what happens when you elect rank incompetents to high office (and I think it is), then isn’t it mostly an object lesson in the dangers of giving politicians actual power?

  3. Actually most of the banks that failed, and the ones that didn’t fail because they were taken over before the wheels came off, were run by non-bankers. Ritchie is therefore totally wrong. The problem is that banks aren’t run by bankers. Far too many of them are run by accountants and politicians.

  4. Indeed Frances

    It is entirely possible that ‘qualified’ doesn’t mean formally qualified in this area. It is perfectly possible for the skill sets to have been picked up in a rated field. That, howevern must apply to a minority ans must watched very carefully.

  5. The ex-Chief Exec of the British Bankers Association – that most odious of scumbags, (ugly pantomime) Dame Angela Knight was not a banker either.

    If there was anyone guaranteed to make me swear at the radio, it was her. Now she’s Chief Exec of Energy UK, which causes me to rant at the radio again when she’s on in her new capacity.

    Seriously, she needs assassinating.

  6. The Grauniad seems entirely to have missed the point about the Coop v the Nationwide v John Lewis Partnership. Those are three radically different structures, as different from each other as they are from normal big companies owned by external shareholders. And they have radically different incentives as a result.

    This is not just ignorance. It is mode of lefy thought: there are goodies and baddies, and it is ostensible or attributed motive that determines a person or organisation is among the elect, not the results that may be produced. Unignorable bad results are attributed to the evil motives of baddies not bad systems; good results from disapproved motives are on the other hand ignored.

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