What kind of standards do we expect from the leaders who shape the way our businesses and social institutions function?
A little while ago my friend and colleague Sam Bright wrote an article for this site in the aftermath of erstwhile Barclays boss Bob Diamond’s resignation due to the unfolding LIBOR scandal. In it, Sam asked where the responsibility for such scandals should fall, and whether it’s appropriate in such instances to assign – or conversely, to restrict – blame to the shoulders of the “people at the top.”
Both the article and the issue itself raise challenging questions about accountability to the public. Ignoring for a moment the specificities of the Barclays scenario, there’s the broader question in any such instances of whether it is really reasonable to expect the resignation of an individual who might have had no idea about ongoing improprieties in his or her organisation. At the same time, holding accountable only the person or few people directly responsible for various misdeeds might see a handful of low-level “bad apples” out of their jobs, but is this enough to maintain or restore the public’s trust in the organisation as a whole? And what about, as Sam asks, the wider group of enablers – the legislators who created a legal framework where such scandals could take place, the regulators who turned a blind or even colluding eye, or the wilfully-ignorant shareholders who collectively had the power to demand better but failed to? Should any culpability rest with them?
It’s a question often asked in a political context, too. Every student of politics or constitutional law will be familiar with the convention of ministerial accountability. The principle in its purest form suggests that government ministers, as heads of their departments, are responsible for all the acts and omissions therein: as a result, they must resign if serious errors are committed either by individuals under their control or as a result of the system and policy framework they supervise, or if their policies and decisions prompt serious criticism or cause the government embarrassment. As Enoch Powell put it, “even if all considerations of policy could be eliminated, the responsibility for the administration of a department remains irrevocably with the minister in charge.”
The issue of whether and to what extent this convention applied gained prominence in the 1960s during the Crichel Down affair, which saw Sir Thomas Dugdale resign, and again in the 1980s when Lord Carrington and Richard Luce resigned over the Falklands crisis. These resignations were imbued with a kind of samurai-style sense of personal honour and desire to save face – a sense of “because it happened on my watch, I’ll save [my / my government’s / my company’s] reputation and fall on my sword.” As Dugdale told Parliament, “I, as minister, must accept full responsibility for any mistakes and inefficiency of officials in my department, just as, when my officials bring off any successes on my behalf, I take full credit for them.”
That sentiment – or at least the first half – certainly isn’t the prevailing attitude any more. Now, there’s a sense that it doesn’t matter whose head rolls in response to scandals, as long as someone gets the axe. Somewhere, a backroom calculation is presumably performed gauging how high-ranking a sacrificial staffer needs to be in order to satisfy the braying press pack or outraged opposition. Then, the coup de grace is struck, and a hapless flunky of the minimum required level is sent packing to deflect pressure from the higher-ups. Jeremy Hunt hung on at the expense of his aide Adam Smith. Liam Fox delayed his demise by distancing himself from one-time associate Adam Werritty. Seemingly impossible to get rid of, ministers nowadays cling to their positions with the tenacity of tapeworms—which of course fall under Jeremy Hunt’s remit, now that he’s Health Minister.
In the aftermath of the Crichel Down affair, Sir David Maxwell Fyfe distinguished four kinds of instances of error where accountability – whether by resignation or explanation to Parliament – could be expected:
- Civil servant carries out an explicit order of the Minister’s
- Civil servant acted in accordance with policy laid down by the Minister
- Official makes an error or causes some delay, but not on an important issue of policy and not where claims to individual rights are involved – Minister responsible as head of department
- Civil servant commits reprehensible conduct of which the Minister disapproves
The examples relate to government, but we can imagine them in any number of spheres, and could just as easily replace “civil servant” and “Minister” with “anonymous trader” and “senior executive,” “junior doctor” and “supervising consultant” or even “parish priest” and “archbishop.”
We can imagine the cases on a rough spectrum of culpability. In the first case, the Minister (or analogous equivalent) is directly linked to the wrongdoing – the action or omission is done on his or her say-so. In the second, there is “operational” but not “personal” responsibility – the subordinate made the decision, but under a general policy authorised by the Minister, with whom the “buck stops.” Under the third heading, the subordinate might not have been following a specific policy, but an error is committed nonetheless, on behalf of the department and thus technically in the name of the Minister. Finally, in the fourth example, the civil servant is guilty of serious, reprehensible personal conduct that the minister does not condone.
Once, wrongs spanning categories one through three, and possibly four if serious enough, could prompt a Minister to step down. However, post-World War II and particularly since the 1990s, resignations have increasingly come in response to personal culpability alone. When New Labour Immigration minister Beverley Hughes came under pressure following the illegal granting of visas, what finally drove her from office was not the initial alleged misconduct, but the fact that she personally misled Parliament in statements made in a television interview. Similarly, David Blunkett was alleged to have misused his power as Home Secretary to influence the outcome in an application by an employee of his then-partner for leave to remain in the UK. It was never conclusively proven whether Blunkett had acted improperly in his role as minister: like Hughes, he was ultimately forced out by the misleading statements he made regarding the matter.
Do we simply expect less from government ministers today? Is the honest self-appraisal and sense of principle of someone like Lord Carrington a relic of a bygone age? Alternatively, are we only now approaching fairness by holding simply the people directly responsible for wrongdoing to account? Indeed, what do we even mean by “accountability”? Does this imply being held personally to account, regardless of culpability, or rather, simply being expected to explain how the wrongdoing occurred, and what steps have been taken to prevent it happening again?
There’s a larger question here too: namely, why we demand resignations or seek to impose penalties at all. A few suggestions might be ventured:
1. To punish genuinely serious individual wrongdoing
Our sense of justice and fairness tells us that there ought to be a punitive element in response to wrongdoing, especially by people in positions of authority. One way of satisfying this is via retribution: someone who behaves in a way that fails to meet the standards expected of someone in that job should lose the job – the “Profumo” kind of resignation, if you like.
2. To respond to the fact that such wrongdoing could happen at all
If there’s a perception that fault lies with an institution itself, and not just one “rogue” individual, then we might reasonably expect that a superior is held to account. This desire strikes closer to the traditional understanding of ministerial responsibility. Bob Diamond’s resignation (although complicated by the involvement of the Governor of the Bank of England) roughly falls into this category: “It was in your power to detect and stop this, and you didn’t.”
3. To deter against allowing deleterious corporate or political cultures to persist and to prompt greater top-down awareness
Individual cogs in an institutional machine have little scope to change a culture that indulges or enables impropriety. With this in mind, demanding the resignation of the few high-level people who can set such a tone serves both to wipe the slate clean in the case at hand, as well as to send a message to others in similar positions that matters of institutional culture are their responsibility.
Equally, such punishments put power players on notice that wilful ignorance isn’t good enough. Perversely, limiting “accountability” to one’s own actions can actually disincentivise authorities seeking, of their own initiative, what is actually going on, or insisting that their subordinates keep them informed. This is the Murdochs’ legacy from the phone hacking scandal: their implicit acceptance that it was safer to be ignorant than to be aware of, and thus complicit in, any misdeeds.
4. To maintain or restore confidence in the system
Finally, a crucial aspect of the motivation behind holding powerful institutions to account must be that “the system” – political, financial, educational, religious, etc – has to be seen to be working. In addition to punishing individual and collective wrongdoing and deterring against future wrongdoing, public penalties have to maintain or restore public confidence in a system. We need to believe that justice has been done—indeed, that fairness has been done—because where this isn’t the case – slap-on-the-wrist responses to insider dealing, trivial fines for crooked corporations, and so on – trust is lost and everyday users of the system become cynical. The firing of somebody suitably important in the maligned institution helps ensure that this isn’t the case.
It’s also equally vital to articulate why we shouldn’t demand punishment. In today’s political climate, demands for resignations seem to follow every poorly phrased comment or minor error-in-judgment by political actors. There is an evident urge to “claim scalps,” and whether it is inspired by a hyper-partisan, tit-for-tat politics, or a 24-hour news cycle that thrives on the drama of sensationalised stories with overstated significance, it exists to the benefit of no one.
Where the calls for resignation are deemed to be excessively partisan or capricious, then the resistance by the people targeted becomes more deeply entrenched. It becomes a question of us-versus-them: “Forget the principle of the matter – because the opposition party have been calling for my resignation, if I give in now, it looks like they win!”
In such a climate, it becomes increasingly difficult to distinguish how serious an issue really is. If the “default” is to conduct our national discourse through yelling, how can we raise our voices when something really is important? We’ve fallen into the same trap as the boy who cried wolf. If every issue is claimed by one side to be a “resignation-level” issue, and the other side won’t risk giving in (save for instances of obvious personal wrongdoing on the part of the person in question) for fear that conceding a point will show weakness, then we’re stuck in a stalemate, with both sides perpetually outraged.
What recent public events have taught us, from LIBOR to Leveson, is that in the current political climate it isn’t reasonable to expect people to voluntarily step aside as a point of principle. Equally, when resignations do occur, it is pressure, not principle, that prompts them. Events over the past few months illustrate that the most successful tactic to resist pressure to resign is to deny personal culpability and to make a show of sacrificing a scapegoat. This worked for Jeremy Hunt, and until Sir Mervyn King intervened, it was working for Bob Diamond too. Make no mistake: although Diamond made much of the principle of corporate accountability as a reason for his departure, had it been down to principle alone, he would still be in a job.
A system where the consequence of a mistake hinges on how much pressure can be ratcheted up to capitalise on it is clearly not a satisfactory state of affairs.
All too often, guidelines, ombudsmen, and regulatory bodies lack the teeth necessary to instil confidence in the systems they seek to uphold. Such was the case in the Hunt affair: although the Ministerial Code seeks to establish proper conduct for ministers, and provides some vague scope for sanctions to be imposed in the event of its breach, it is enforced by the Prime Minister, and thus is inherently partisan. In Hunt’s case, much was made of the fact that Sir Alex Allan, the “independent adviser on the Ministerial Code,” lacked the power to initiate investigations of his own volition without being directed to do so by David Cameron.
If we are to return to a principled system of public accountability, we need to create a system of genuinely independent, non-partisan ombudsmen and arbiters to establish objectively what those principles are. They must be given full scope to initiate and carry out investigations into alleged wrongdoing. Their investigations should be wide-ranging, looking at the individual, company (or ministry) and industry level. Such bodies should not be given the power to remove people directly, but their findings must be taken seriously: if culpability is established on an individual level, then the superiors of the people responsibility must act. If wrongdoing is shown to have occurred on a wider level, then the individuals in positions of collective authority must suffer the consequences. If the problem identified includes a loose or unclear regulatory framework, or ineffective self-regulation of an industry, then the report should recommend new legislation, and Parliament should act on this.
Where impropriety is of debatable severity, trying to leverage it into deep reforms can look like political gamesmanship by the untainted party. There are relatively few instances where conduct is so egregious that all sides involved accept that punishment and reform are deserved. Such conspicuous failures of the system inevitably provoke disillusionment, but universal condemnation also provides a rare opportunity for all sides to get behind serious, far-reaching changes. We’re at such a juncture now, and it is to be hoped that the decision-makers seize the moment.