This is how NatWest Group describes its policy on protecting privacy and customer confidentiality. “We see privacy as a vital component to achieving our purpose and [it] is therefore embedded across all parts of our business,” it starts, adding that “anyone breaching the policy can be subject to disciplinary action”.
It continues: “All our customers, colleagues and third parties can therefore be confident that we treat protection of their data with the utmost seriousness.” And it concludes: “Updates and reminders are also provided through internal communications to ensure privacy is at the forefront of all of our colleagues’ minds.”
All banks have similar policies and NatWest’s version is a critical prism through which to view the former chief executive Dame Alison Rose’s “serious error of judgment” – her words on Tuesday hours before she resigned – in discussing Nigel Farage’s relationship with the bank and its Coutts subsidiary. She breached a policy that NatWest tells its staff, in unambiguous terms, must not be breached. The policy applies, needless to say, even if you find the client’s views loathsome.
Rose’s compounding error was that she had not got her facts straight when talking to the BBC’s business editor, Simon Jack, early this month. It turned out that Coutts didn’t drop Farage solely because he had fallen below the qualifying criteria to be a client. Its reputational risk committee had also deemed him to be unwanted, or too risky, because his views “were at odds with our position as an inclusive organisation”.
Rose maintained she didn’t reveal any personal financial information to Jack but that is hard to square with her admission that she recognised that she left the reporter “with the impression that the decision to close Mr Farage’s account was solely a commercial one” – in other words, based on financial criteria alone. It sounded like dancing on the head of a pin. What’s more, if the BBC’s version of events is correct, Rose was given the chance the day after the fateful conversation to retract the story and still an alarm bell didn’t ring.
Can Rose say in all honesty that she would have looked leniently on a NatWest employee in similar circumstances? And could the board of NatWest claim the same? Unlikely.
That is the central point in the latest chapter of this bizarre tale. The wider affair has many layers – such as banks’ obligation to treat customers fairly if they wish to close accounts – but the angle specific to Rose was about confidentiality. If NatWest’s privacy policy is as strict as it is presented, it has to be seen to apply to all employees. A junior member of staff would expect to lose his or her job. In expressing its “full confidence” in Rose on Tuesday evening, the NatWest board and its chair, Sir Howard Davies, looked as if they were giving the chief executive special treatment.
If Rose was naive in briefing the BBC, the board of NatWest was doubly so in thinking she could survive without the backing of the chancellor and Downing Street. When your bank is 39% owned by the state, you have to carry political support when the stakes are this high. It is astonishing that Davies, a former regulator and one of the FTSE 100’s most experienced chairs, seemingly ploughed on regardless. Rose and the board were undermined within hours by reports of concerns from the Treasury and No 10, leading to the U-turn in the middle of the night.
None of which is to deny that Rose has mostly done well in her four years in the post. In the round, NatWest looks more stable than it has done for years. Nor is there anything wrong with banks – as long as they remember that lawful free speech matters in a democracy – having “a purpose” if that means considering their role in society and having regard to more than just the maximisation of profits.
Nor should we forget that other bank bosses have survived comparable scrapes in the past. Jes Staley at Barclays in 2018 somehow escaped with a bonus-docking penalty (the NatWest board’s plan A for Rose) after he tried to unmask a whistleblower, another regulatory no-no.
Yet one still comes back to the basic point that bank bosses cannot be seen to get off lightly if they breach rules on privacy and confidentiality that they are supposed to enforce on others. Rose is personable, engaging and otherwise competent. But her position was untenable. She had to go.
