Fred, shredded

The RBS saga

Fred, shredded

ARISE, Mr Goodwin. Britain’s honours forfeiture committee has ruled that Sir Fred, as he was once, should be stripped of his knighthood after his tenure as chief executive of the Royal Bank of Scotland ended ignominiously with a huge bank bail-out. Mr Goodwin joins a list of ex-Sirs whose members include Anthony Blunt, a Soviet spy, and Robert Mugabe, the president of Zimbabwe.

If you think that is over the top, you’d be right. Galling as it is to imagine Mr Goodwin insisting on being called Sir Fred at his local corner shop, or offering his hand to be kissed at the bus stop, no power flowed from his title. Shame is an important sanction when very well-paid people screw up, but Mr Goodwin’s reputation was already in the gutter, following the bank’s failure and a nasty, public row over his pension entitlement. Knighthood or not, he was not about to walk back into public life.

True, Mr Goodwin had an abrasive management style that made him the dominant figure at RBS when it decided to lead a consortium bidding to acquire ABN AMRO, a Dutch bank. But if he was really that out of control then why not go the whole hog and strip Sir Tom McKillop, the RBS chairman and Mr Goodwin’s boss at the time, of his knighthood, too? More pertinently, poor decision-making was hardly confined to RBS. The battle for ABN began when Barclays announced it would merge with the lender: if ABN had not sunk one British bank, it would have torpedoed another.

News of the forfeiture committee’s verdict comes days after a row involving Mr Goodwin’s successor at RBS, Stephen Hester, who this weekend waived his entitlement to a controversial share award. The differences between the two men are obvious: one deeply culpable for RBS’s fall, the other trying to mastermind its revival. But both stories have lazily focused important debates about the governance of banks, and the compensation of bankers, on to specific individuals. Mr Goodwin was not uniquely reckless; Mr Hester is not exceptionally well-paid compared with his peers. Turning the likes of Sir Fred into pantomime villains lets the industry off the hook.