Is it serendipity? I cannot claim it as anything else but the debate raging about the big city bonuses certainly is convenient for me, following as it does my last posting about disappearing trust, its destructive consequences and the need to rebuild it.
After weeks of political arguing, with the banks defying public opinion and political demands to maintain their right to pay their executives their bonuses, the chief executive of the Royal Bank of Scotland has volunteered to forego his million pound bonus. Yet, this is still not the end of the matter. This is just one man, and the fact remains that there are many others, in that bank and others, who are contractually entitled to similar or bigger bonuses. Now the papers are full of headlines like the one in today’s Times newspaper, “Business tells ministers to back off on bonuses.”
Of course there are a number of different factors at play here which make this a fascinating topic for debate. However, the fact is the law is on the side of the bankers. They are contractually entitled to their bonuses and as such are within their rights to claim them. In which case:
• Does foregoing them mean that:-
o They are being blackmailed or coerced into their decision; or
o They recognise their inappropriateness in these tough economic times?
• Does not foregoing them mean that they are:-
o Justifiably standing up for their rights; or
o Simply selfish, arrogant, insensitive so-and-so’s?
No doubt you have your own thoughts on the matter, and I am not going to argue either way!
All I am going to ask is that you think about the ethics of getting into this situation in the first place. Ask yourself if it is just or morally right that:-
• A select few can be entitled to performance related rewards that are equivalent to 4-5 times the price of an average home, or more?
• These people can earn percentage bonuses so that are so far out of kilter with the percentage bonuses that any other employee can earn? (Remember, their proportionate contribution is already recognised and accounted for in the fact that they earn a higher basic salary to begin with.)
Whatever you think you will possibly better understand my point that laws proliferate when we lose sight of principles. It is not just jealousy and majority outrage that creates the forces that are leading governments to try to legislate against such “excessive” earnings. And you know as well as I do that any attempt to legislate will result in greater efforts to flout them and greater costs to try to enforce them – all part of the problem of excessive government that got us into the current economic mess in the first place.
And if you agree that this is a state of affairs is immoral and unethical then you will understand why I say that it is also part and parcel of the reason that trust is breaking down. Certainly that is the perception of the vast majority. That being so it has to be one of the things that has rectified if you want to rebuild trust, engender employee engagement and enhance organisational and national productivity.
So are you going to work with me to help rebuild these foundations?