By Ian Fraser
Published: The Sunday Times
Date: 15 March 2009
Sir Steve Robson, one of seven RBS non-executive directors to be purged last month, is facing calls to resign as non-executive director of the Financial Reporting Council (FRC).
If Robson remains in his post, critics suggest the FRC could lose credibility. At RBS he was partly responsible for one of the largest bank collapses in UK history.
“The whole civil service ethos is that Caesar’s wife is above reproach,” said Robert Bertram, a corporate lawyer with experience as a non-executive director of listed companies, who served as a member of the Competition Commission.
“Whether or not Robson, a very distinguished public servant, has made his own position untenable, it seems the FRC itself has made it untenable. In choosing to make the effectiveness of non-executive directors the key building block in UK corporate governance, it cannot expect credibility for its central doctrine when one of its own directors is not perceived as an example of effectiveness in that role.”
Stewart Hamilton, professor of finance and accounting at IMD, the Lausanne-based business school, said: “It is unconscionable that a director of a failed, or almost failed, bank, now largely dependent on the support of the British taxpayer, should continue to hold a position in any oversight body in relation to financial markets or financial services.”
Robson, a former career civil servant who became second permanent secretary at the Treasury, joined RBS in July 2001. Last month Sir Philip Hampton, the bank’s chairman, purged him and six other non-executives, including Sir Peter Sutherland, Bob Scott and Jim Currie. They were accused of having failed to protect shareholders’ interests and failing to stand up to chief executive Sir Fred Goodwin.
The FRC, established in 1990, is an independent regulator responsible for promoting confidence in corporate governance and reporting. It oversees the combined code of corporate governance, actuarial and accounting standards and professional standards within certain professions. Robson, who has been described as being “as far away as one can get from the classic caricature of a Treasury mandarin”, became an FRC non-executive director in October 2007.
Sir Christopher Hogg, chairman of the FRC, said: “Sir Steve was selected as a director of the FRC under full scrutiny of the government. It was part of the FRC’s restructuring and his appointment was approved by the government, which went through all due process in the appointments that were made at that time. I and all my colleagues have full confidence in him as a board member.”
At the Treasury, Robson played a key role in establishing tripartite financial regulation, which is seen as having contributed to the financial crisis.
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