It’s unusual that disgraced businesspeople hand over some of the trappings of their former ‘success’ with good grace. But on Tuesday the former boss of HBOS – the first UK bank to need a government bailout back in 2008 – resigned his current post on the board of Compass Group, and offered up his knighthood. And if that wasn’t enough, he also agreed to forgo 30% of his £580,000-a-year pension as a sort of penance for the bad times that he and his cohorts presided over.
So what exactly has prompted this extraordinary display of (caveated) humility? Well, in a report on the financial crisis and who’s to blame last week, the Banking Standards Commission named Crosby as one of the main ‘architects’ of HBOS’ downfall. He was the boss of the bank between 2001 and 2006, a period during which many banks were already firmly on the path to their own demise. A Whitehall committee has still to consider his request to relinquish the knighthood. Watch this space.
In the meantime, he has already resigned his post as a non-executive director of the world’s largest catering firm, Compass Group. Chief executive of the firm, Sir Roy Gardner, said: ‘On behalf of the board, I would like to thank James for the significant contribution he has made to the company over the last six years.’ Let’s hope that it is not the same type of ‘contribution’ he made at HBOS, otherwise there could well be some skeletons in the pantry.
Crosby said that the Banking Standards Commission’s report made for ‘very chastening reading’, offering a statement which was remarkably heart-warming for a disgraced banker. ‘Shortly after I left HBOS, I received the enormous honour of a knighthood in recognition of my own - and many other people's - contribution to the creation of a company which was then widely regarded as a great success.
‘In view of what has happened subsequently to HBOS, I believe that it is right that I should now ask the appropriate authorities to take the necessary steps for its removal.’ Interestingly, Crosby was also the deputy chairman of the Financial Services Authority between 2007-2009 – at the zenith of the crisis in the financial sector. He’s really had a stormer there: boss of one of the biggest banks to fall, and then almost-boss of the regulator that watched it happen.
It may be a bit late, but it looks like the number of scalps claimed by the banking crisis is on the rise. First Fred Goodwin, next James Crosby, and now Dennis Stevenson and Andy Hornby (also former HBOS execs) will be feeling the heat...