November 30, 2023


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Coutts has forgotten what the job of a bank is

5 min read
Coutts has forgotten what the job of a bank is

We now have a reluctant apology from Dame Alison Rose, followed by her even more reluctant resignation. Her departure is a major achievement, but the reluctance is a symptom of the problem. How could she possibly have thought she could stay after she was caught breaking a client’s confidentiality and spreading untruths about him (untruths which the BBC checked with her before publishing)? How could her chairman, Sir Howard Davies, have possibly thought that she could? And still we have nothing from Coutts, the bank that tried to trash Nigel Farage in the first place. Coutts is a B Corp, meaning a corporation which signs up to the commandments of current virtues, such as sustainability and inclusion. On its website, it headlines its B Corp work with the words ‘Doing well by doing good’. Its executives may not be aware of that phrase’s appearance in Tom Lehrer’s satirical song, ‘The Old Dope Peddler’:

Ev’ry evening you will find him
Around our neighbourhood.
It’s the old dope peddler,
Doing well by doing good.
He gives the kids free samples
Because he knows full well
That today’s young innocent faces
Will be tomorrow’s clientele.

The old peddler of Coutts’s woke dope is its chief executive, Peter Flavel, who introduces the website’s sustainability section by quoting Coutts’s founder, Thomas Coutts: ‘To be, not to seem.’ ‘To become B Corp-certified,’ he goes on, ‘has been one of our proudest moments – in a real sense, evidencing our purpose in action.’ What was the bank’s purpose in action in closing Mr Farage’s accounts? ‘Meet the Board’, says the Coutts website invitingly, but we can’t. Since the story broke, I can find no public comment by Mr Flavel or the bank’s chairman, Lord Remnant. In an interview with ESG Clarity, given before all this, Mr Flavel said that being a B Corp meant the board could ‘hold ourselves to account on how we are running the business’: Coutts is ‘a company that wants to do the right thing towards all stakeholders’. Yet there has been no sign of the Coutts board holding the executives to account and no explanation. How is it that chairmen and boards exist in law to ensure companies are properly run, yet freeze when people produce evidence that they aren’t?

These ‘purposes’ and ‘values’ devised for B Corps are simultaneously wrong and otiose. It is not the job of a bank to ‘be the change you want to see in the world’, a matter on which people legitimately differ. Its job is to serve its customers. Another private bank – in its case, a family one – is Hoare’s. Its longstanding stated purpose is simple: ‘To be good bankers and good citizens.’ This makes the important connection between a bank and the welfare of society, but wisely does not specify or preach or become political. It therefore maintains its aim much better than Coutts. All these rich white men who suck up to B Corp doctrines see this obeisance, perhaps, as a survival tactic, but in fact they are lambs – or elderly sheep – to the slaughter. Lesson: never bank with a B Corp.

The other day, I watched a financial institution in action. Now that my mother is very old, I help with the management of her affairs. I went to the local branch of the Nationwide Building Society where she banks. (It is not, by the way, a B Corp, and all the pictures it uses on its website are of its actual members.) I joined the queue. Behind the two tills sat a friendly clerk and the friendly manager. Every single audible customer present, including me, was there with a minor inquiry generated by an error or shortcoming of our own – a forgotten pin number, a miscounting of sums which required adjustment, a statement lost. Many were old. All were treated with respect and patience, lightened by unintrusive backchat. The atmosphere was peaceful and trusting, as in a good GP’s surgery. Nationwide is one of the few building societies which did not demutualise. It, not Coutts, knows how ‘to be, not to seem’. My visit gave me a glimpse of the world most high streets have lost and most banks have abandoned. 

Last week, I met Ukraine’s ambassador to Britain, Vadim Prystaiko. Two days later, President Zelensky sacked him. I have no reason to think these two events are connected, but the sacking is a pity. Mr Prystaiko did go a bit far. He described the President’s rebuke of Ben Wallace, the Defence Secretary, as ‘unhealthy sarcasm’. (Mr Wallace had protested at Britain being expected automatically to deliver whatever Ukraine needs.) Ambassadors should not say such things publicly, particularly when there’s a war on. But Mr Prystaiko has been an eloquent and active exponent of his country’s cause and achieved real success. I would say he was the most influential foreign ambassador in Britain since Ray Seitz did the job for the United States 30 years ago. Surely he could have had his knuckles rapped rather than his job removed? His sacking is a reminder that Ukraine has still not completely shrugged off its pre-war reputation for inadequate civil institutions. It needs western help building them.  

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I received this email on 18 July, Nelson Mandela Day: ‘Flooring Hut is excited to announce its future commitment to honouring the legacy of Nelson Mandela through initiatives that combine the principles of social responsibility with their expertise in flooring solutions… In alignment with his values, Flooring Hut recognises the power of making a positive impact in society. Through their unique position in the flooring industry, the company aims to leverage their expertise to improve the lives of individuals and communities in their local area of Worthing, West Sussex.’ Don’t laugh. This is no sillier and much more positive than Coutts’s rambling internal memos about why, being ‘inclusive’, it should exclude Nigel Farage.


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