After Co-op, the building society bosses with no bank experience
The Co-operative began a root and branch review of its “democratic structure” last night in the wake of the mounting scandal over the drug-taking of the former Co-op Bank chairman Paul Flowers.
The society also said it had begun a “fact finding” exercise to look at potential “inappropriate” behaviour at the Co-op and its bank after film emerged of Mr Flowers purchasing drugs over the weekend.
An investigation by The Independent into the backgrounds of building society chairmen showed that only three of the top five below Nationwide, the sector’s heavyweight, have banking experience and only one can claim to have an unblemished record.
Had they started out as non-executive directors they would not have been re-interviewed by watchdogs to assess their suitability as chairmen under the rules in place at the time.
Last night watchdogs were under pressure to reform their procedures amid growing public concern over the abilities of the people at the top of Britain’s financial institutions.
The Parliamentary Commission on Banking Standards labelled the Financial Services Authority’s approved persons regime as “not fit for purpose” in its final report and frustration is mounting among its members at the slow pace at which it is being changed.
Andrew Tyrie, chairman of the Commission and the Treasury Select Committee, told The Independent: “We didn’t need Paul Flowers to illustrate all this; we already knew that the approved persons regime was not fit for purpose.
“[This] episode has only reinforced the conclusions that the Commission had already made, [that the regime] should be scrapped.”
Mr Tyrie said he and the Commission wanted to see “vigorous and continuous” supervision for those at the top of financial institutions.
But asked if the Financial Conduct Authority, the successor to the Financial Services Authority, would re-interview Building Society chairmen to assess whether they were still suitable for their roles, he said: “Ultimately it is the job of a board to decide upon the make-up of its leadership team.”
That is likely to fuel mounting concern among MPs that many of the people responsible for the old regime still have senior roles within the FCA.
Mark Garnier, an ex-investment banker, and a colleague of Mr Tyrie’s on the Commission and the Treasury Select Committee, said: “It’s absolutely vital we get the regulator back because of the questions that are being asked. What the hell was going on to make the regulator approve this guy?”
Mr Flowers, a Methodist minister and local Labour politician within the Co-operative movement, had little apparent banking experience despite winning a succession of high-profile appointments to various worthy bodies.
Credentials: Building Society chairmen
Nationwide: Geoffrey Howe (no relation)
Skills and experience: Also chairs insurance broker Jardine Lloyd Thompson and on the board of Close Brothers. Former chairman of Railtrack and managing partner of law firm Clifford Chance.
Ticks the boxes? Not exactly a banker, but lots of creds
Yorkshire Building Society: Ed Anderson
Skills and experience: Accountant by training, career divided between airport management and local councils.
Ticks the boxes? Little obvious banking experience in there
Coventry Building Society: Ian Pickering
Skills and experience: Chartered accountant and who has worked in the engineering industry, including as head of Manganese Bronze, the taxi maker.
Ticks the boxes? Little obvious banking experience in there
Skipton Building Society: Mike Ellis
Skills and experience: Various executive posts at Halifax (he joined in 1997) until becoming finance director of HBOS before the financial crisis.
Ticks the boxes? Loads of banking experience but he is the former FD of HBOS
Leeds Building Society: Robin Ashton
Skills and experience: Chartered accountant and 23 year veteran of Provident Financial, who quit as chief executive as the doorstop lender split in two after various disasters.
Ticks the boxes? Not necessarily the experience you’d want
Principality Building Society: Dyfrig John
Skills and experience: A 38 year career with HSBC, from management trainee to very near the top of the organisation. Widely respected.
Ticks the boxes? Best of the lot
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