The Lawyer Africa Elite 2014 features an in-depth look at 46 leading independent firms’ strategies in 15 key sub-Saharan jurisdictions, as well as the views of in-house counsel from some of Africa’s largest companies... Read more
This year, The Lawyer’s annual ranking of the largest UK law firms by turnover is available as an interactive, digital benchmarking tool. For the first time this will allow you to manipulate each data set against the metrics of your choice.
Directors of failed banks should be held accountable for their actions according to the long-awaited report into the collapse of the Royal Bank of Scotland (RBS) in 2008.
Published by the Financial Services Authority (FSA), the 500-page report concludes that RBS’s crisis was down to poor management and board decision-making as well as due diligence and regulatory failings, which led to a £45bn government rescue package.
FSA chairman Lord Turner argues that in order for future failings to be avoided, an extensive overhaul of laws surrounding accountability for negligent management, poor decision making and corporate recklessness needs to be implemented.
“The fact that no individual has been found legally responsible begs the question: if action cannot be taken under existing rules, should not the rules be changed in the future.”
Banks’ failures are a public concern as they lead to taxpayer losses and wider economic harm, Lord Turner says.
According to the report, in order for bank executives and boards to strike a different balance between risk and return a “strict liability” approach needs to be adopted.
This would mean that bank failures such as RBS’s would be followed by enforcement actions, including fines and banks. Additionally, Lord Turner suggests that bank executives should not be allowed to take on future positions of responsibility and remuneration should be deferred or forfeited in the event of failure.
“There are important pros and cons of these different ways forward, and complex and important legal issues which would need to be considered.
“But by one means or another, there is a strong argument for new rules which ensure that bank executives and boards place greater weight on avoiding failure,” Lord Turner concludes.
Lord Turner, who took on the role as chairman of the FSA at the height of the financial crisis, also attacked the FSA’s role in RBS’s collapse, suggesting that the financial regulator’s supervisory approach provided insufficient challenge to RBS.
At the time, only six FSA supervisors monitored the bank compared with 23 today, the report reveals.
Ex-Simmons & Simmons senior partner Bill Knight was drafted in to help conduct the FSA’s investigations.