News Digest 20/11/15: HBOS Report And Charity Governance Costs

Limited penalties for HBOS top team

Any further action against HBOS' board, management and regulators is likely to take two years and be limited to industry bans. This is despite having the blame lain squarely at their feet for the bank's collapse in 2008 in a report by independent barrister, Andrew Green QC.

The investigations concludes that board and senior management failed to set appropriate strategy or challenge a flawed business model.

ICSA Policy & Research Director, Peter Swabey FCIS commented on the report: 'It is important that lessons are learned both from the detailed report produced by the Bank of England and the FCA on the failure of HBOS and from Andrew Green's report into the regulatory failures of the FSA in terms of monitoring HBOS. However, it is equally important to ensure that the lessons learned are the right ones. There is disquiet that the production of these reports is seven years after the events to which they relate, but equally that distance in time brings a clarity to events that helps to understand them and to ensure that those against whom further regulatory action may be taken are those guilty of negligence or malfeasance, rather than of poor judgement. Businesses thrive on risk, but that risk must be appropriately mitigated and subject to appropriate governance to ensure that it is carefully weighed against potential benefits and not simply accepted as the easy solution to a business problem. At first sight, it is this failure to assess, recognise and manage increasing levels of risk that left HBOS unable to survive turbulent market conditions.

'Businesses do fail; and there is nothing wrong with that where all reasonable steps have been taken to prevent this. It rather looks as though some senior executives and board members were guilty of rather more than poor judgement.'

Charities overstate governance costs

A Charity Commission report has shown that many...