Time Called on Non-Executive Directors?

The role of Non-Executive Directors (NXDs), or perhaps I should say lack of, in the explosion of the banking system has really had little scrutiny. It is perhaps a relief that a Treasury sponsored review by Sir David Walker is finally taking a hard look.

The only real prominence on NXDs was the role that McKillip and Scott played in Fred Goodwin's pension scandal - but it is worth noting that the Government official sent to supervise the whole fiasco was a serial NXD in Lord Paul Myners. They look after their own, those boys. Meanwhile, on the regulatory side, Lord Adair Turner, the Chairman of the FSA, has around 10 jobs, many of which are highly paid NXD roles.

McKillip was castigated for his foul up on Goodwin and because of it he lost one of his prize roles, a place on the Board at BP. You see, in the stratospheric world of high-end NXD roles, once you are on the gravy train, it is very difficult to get off it. And the fact is, once you are on it, you have 'form' and so you are offered many more jobs and build yourself up a nice portfolio of highly paid, very part-time roles where you are responsible for nothing and never held accountable for anything.

Sir David Walker intends, amongst other interesting things like curbing city pay scales, to make NXDs a more accountable role, have them better trained for the job and make them play more of a part in the Governance of the Companies they are paid by. Fat chance.

The whole review thing is too late anyway. The financial gravy train has picked up more fuel and is underway again with no new regulation in sight and big bonus payouts just on the horizon. The chance of getting any kind of controls and checks in place on the City are about as likely as me winning the British Open this week. The astute among you may spot I am not actually playing in the Open and that is my point. Sir David Walker is a side show. The City will ultimately decide what happens because it has the stranglehold over the Government.

In fact, now that we own so much of the banks, they have us exactly where they want us - we pay the bills and they will make enough returns to get the public money back on the share outlay, but only if Government butts out. If the Government does interfere then there is a risk that the money does not get paid back and where would that leave the PM in the run up to an election?

Rest assured, the City will get its way. The Government has sold its soul to ensure that.