How to Make Bankers Accountable for their Actions

 Sanderson's Head of Finance, Tim Donaghy, comments on the Parliamentary Commission of Banking Standards' latest report and whether it will make bankers liable for their negligence.

The cross-party Parliamentary Commission on Banking Standards' fifth reports proposes that bankers are held accountable for their actions in the future, and threatens imprisonment for those guilty of 'reckless misconduct'. The report highlights that, despite numerous scandals being illuminated in recent years, senior level bankers have not been punished for turning a blind eye on their responsibilities.

The report advocates that senior bankers should be assigned clear personal responsibilities, with the legal onus on them to show they have done all that is reasonably required; recklessly disregarding their responsibilities should be a made a criminal offence; senior bankers should adhere to a new set of banking standards set by regulators; bonus pay should be deferred for up to 10 years and cancelled if a banker acts irresponsibly and banks should be legally required to put financial safety ahead of shareholder interest. 

These measures are without doubt a step in the right direction, however, it puzzles me as to why five reports on this subject have been made already, yet this is the first time a notion is being mooted! I recently attended an RSG Debates event based around the question of whether businesses can self-regulate. An interesting point was made during the course of the evening; a blue collar worker can be imprisoned for stealing £100 out of the petty cash tin, yet a CEO receives a £1m a year pension after overseeing the complete demise of a bank (RBS and Goodwin). The magnitude of the injustice of this double standard is incomprehensible and, as the report points out, for too long bankers have fallen back on the claim that everyone was party to a decision, therefore, no individual could be held accountable. 

It is about time that the high earning executives who we entrust with our money should be made liable if they are found to be negligent. Perhaps the promise of imprisonment, rather than bonus schemes, will incentivise them to be more responsible in the future?

How to Protect Yourself During Pre-Termination Negotiations

Our guest blogger this month, Katherine Sadler-Smith, Training & Know-How Lawyer at Osborne Clarke, explains what the new legislation surrounding confidential termination negotiations means, and how you can ensure that your pre-termination discussions are protected.

Following a consultation exercise in Autumn 2012, the Department for Business Innovation & Skills (BIS) introduced legislation which, from this Summer, will enable employers and employees to engage in confidential settlement negotiations before termination of employment.  As a consequence, both parties should be able to negotiate freely without fear that the anything discussed (such as the value of offers made but declined) may be raised in any subsequent 'ordinary' unfair dismissal claim at an employment tribunal.  Previously, this type of legal privilege only extended to “without prejudice” discussions taking place after a dispute had already arisen.

Sounds good, but what's the catch?

APSCO announces growing need for Finance professionals

Tim Donaghy, Head of Accountancy and Finance at Sanderson, discusses the latest positive news for the Financial Recruitment sector.


Finally, green shoots of news from APSCO! After a year of hearing from FDs and CFOs that they are confident that there is a growing need for more qualified finance professionals, analysts are finally seeing this as a reality. But where is this growing need coming from? Although 2% doesn't sound like a huge increase, this is significant for the finance recruitment sector and is a good indicator of general business confidence. When the finance (and other) recruitment market is in full swing, requirements are created due to three major drivers:

•  Natural attrition and churn 
•  Growth 
•  Business change or projects