Too few people understood the activities of HBOS

A comment from KPMG might be enlightening on whether it sticks by its 2006 conclusions about the process for the assessment of candidates for the role of head of group regulatory risk at Halifax.

Those of us following this story are trying to figure out whether:

  • Paul Moore was right about Jo Dawson.

  • KPMG’s assessment about Dawson was right.

  • Or whether both of the above are irrelevant because the role carried insufficient power to be capable of constraining the terrific pace at which the organisation was growing from 2004 onwards.

    If HBOS’ former chief executive Sir James Crosby was just one of many board members steering the growth of the group in pursuit of short term profits, I doubt anyone would be surprised.

    Perhaps one might enquire about the Financial Services Authority’s view on whether its process for the identification and assessment of candidates for the role of its deputy chairman appears appropriate.

    Was the main problem that the activities in which HBOS and other financial institutions were engaged from 2004 to 2008 were too complicated for decision-makers, including the firms’ boards of directors, to understand?

    If so, then far too few responsible individuals at the firms and the regulator itself stood any chance of holding back the destruction of shareholder value in the face of the majority of stakeholders who favoured the pursuit of short-term profits without understanding the risks.

    Mark Ehlinger

    Director

    The Coaching Platform

    Part of Focus Solutions Group

    By email