Forbes Dina Medland 5/25/2015 @ 5:27PM
Amid a plethora of corporate scandals and media tales of the multiple ways in which individuals in senior positions shake them off, like water off the proverbial duck’s back, does the rising tide of public demand for individual accountability resonate? Tonight, on this side of ‘the pond,’ it seems that it does.
The Fair and Effective Markets Review (FEMR) was established by the UK Chancellor of the Exchequer almost a year ago, in June 2014. It was set up ”to conduct a comprehensive and forward-looking assessment of the way wholesale financial markets operate, help to restore trust in those markets in the wake of a number of recent high profile abuses, and influence the international debate on trading practices.”
FEMR is being led by the Bank of England Deputy Governor Minouche Shafik, along with Martin Wheatley, head of the Financial Conduct Authority (FCA) and Charles Roxburgh, a director-general at the Treasury -and is due to be published on June 10.
But in time-honoured way, it has been leaked – to the Financial Times. The paper reports it is “expected to call for more powers to ban individuals implicated in misconduct and call for harsher sentences for insider trading and other forms of white-collar crime.”
Is the UK moving a step closer to realising that when it come to business and individual ethics- as argued on my independent blog Board Talk – there should be no dividing line ?
In New York last week, this journalist was struck by the open cynicism among American television media when it comes to individual accountability for misconduct in banking. Indignant news presenters on Bloomberg Bloomberg covering Six Banks Pay $5.8billion, Five Guilty Of Market Rigging through the morning nevertheless disparaged any chance of those in charge at the time of the lapses in conduct paying any real price.
That morning, May 20th, JP Morgan shares were up. I tweeted @dinamedland: “JPMorgan shares UP on the news of the fines- where’s the accountability?” Analysts were quoted saying it was all about the end of uncertainty – and moving on. There were unsubstantiated reports that Jamie Dimon, CEO of JP Morgan had said: “That’s fine. We can afford it.”
The language from those who regulate business was also striking, that morning in New York. Watching Bloomberg Television, this journalist saw and heard Loretta Lynch, US Attorney General say: “Chasing profits without regard to fairness and the law is unacceptable.” Ms Lynch spoke of “a brazen display of collusion and market manipulation”, of banks acting as “partners, not competitors.”
When institutions collude, it is surely individuals at the top who are ultimately responsible for sanctioning that collusion. Watching them get away with it, again and again, while walking away with pockets full of cash themselves, has become simply unacceptable.
Since the fall-out from the financial crisis, the ‘mystique’ that surrounded senior figures in business has all but vanished in a less-edited and more transparent world of social media. Businesses are becoming increasingly dependent on what their customers think of them.
UK media reported just this weekend that Amazon would start paying corporation tax on UK retail sales – via interesting media coverage. Public opinion is becoming a very real factor in dictating what is to be expected from the behaviour of publicly listed businesses.