'They should all go' | NatWest chief quits over Nigel Farage fiasco, but firm still at risk of huge reputational damage

NatWest chief quits over Nigel Farage fiasco, but firm still at risk of huge reputational damage

NatWest Group CEO Alison Rose stepped down with immediate effect this week after she admitted to a "serious error of judgment" in discussing Nigel Farage's relationship with the bank with a BBC journalist.

The bank has faced intense political and media scrutiny over a decision by its private bank Coutts to close Farage's accounts. An internal review obtained by the politician-turned-TV show host showed Coutts' wealth reputational risk committee had said his values did not align with the bank's own.

In a statement earlier this week, Rose said: “I recognise that in my conversations with Simon Jack of the BBC, I made a serious error of judgment in discussing Mr Farage’s relationship with the bank.

“Believing it was public knowledge, I confirmed that Mr Farage was a Coutts customer and that he had been offered a NatWest bank account.

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“Alongside this, I repeated what Mr Farage had already stated, that the bank saw this as a commercial decision. I would like to emphasise that in responding to Mr Jack’s questions I did not reveal any personal financial information about Mr Farage.

“In response to a general question about eligibility criteria required to bank with Coutts and NatWest I said that guidance on both was publicly available on their websites. In doing so, I recognise that I left Mr Jack with the impression that the decision to close Mr Farage’s accounts was solely a commercial one.”

Big boss quits but NatWest’s leadership remains under pressure

Rose may have stepped aside but the media storm is far from over for NatWest. Some major investors are also applying pressure on the bank's chair Howard Davies to step down for mishandling the fallout, including saying Rose had the board's "full confidence" hours before she stepped down, the Financial Times reported.

Farage also called for the entire NatWest board to follow Rose out the exit door, stating: "She's gone and it is right that she has gone. However, I think this brings into question the whole of the board. Frankly, because of how they have behaved, I think they should all go."

The knock-on effect for HR

Currently, this controversy is playing out at board level. But the huge debates about NatWest’s leaders making politically motivated decisions could quickly leave HR in a pickle, particularly if staff take umbrage with the board’s actions.

In fact, recent research showed that two-thirds of staff whose employers ignore their values could quit within a year.

The Generation Gap report from Amba, the creators of ESG-focused workplace perks platform, Lumina Perks, which reveals how the priorities of Gen-Z employees differ from their older colleagues. Their study found that two-in-five employees don’t feel their current employer shares their values (42%), whilst almost half (45%) claim their employer doesn’t meet their expectations of what it means to be an ethical business.

If left unaddressed, this could have devastating consequences for UK businesses. Of those workers who don’t feel their employer shares their values, a potentially devastating 58% are considering leaving in the next 12 months.

The research, which was conducted amongst thousands of full-time workers in the UK, found that values are becoming increasingly important to modern workers. More than two-thirds (69%) feel it is important their employer has strong ethics, while two-in-five (62%) actively look for an employer who shares their values.

In fact, a business’s values are now the most important factor when it comes to judging a potential employer (61%), ranking above the quality of its products (40%), its website (21%) and even what other employees say about the company (59%).

Trust too is important in the board’s decision-making process. In the business world, lack of trust has a hugely negative impact on employee performance. Indeed, according to a survey by Tolero Solutions, 45% of people say lack of trust in leadership is the biggest issue impacting their work performance.

Clearly, some organisations – including some very successful ones - do carry on despite this, but trust in leadership is clearly preferable in terms of creating a positive employee experience and therefore productivity. The question NatWest needs to be asking itself – and no doubt already is – is: has the bank’s leadership lost the trust of its employees and stakeholders? And can they win it back?

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