Singapore Fling raises question whether morality shortfalls infer fitness to run a bank
How much moral probity and personal integrity can we realistically demand from bankers?
A “Singapore Fling” isn’t a new cocktail, but a new way for bankers to describe a tryst in Singapore.
It also opens a debate as to how much moral probity and personal integrity we can realistically demand from bankers.
The married CEO of Lloyds Bank came under public pressure to resign last week after allegedly having an affair with an adviser to Tony Blair.
Antonio Horta-Osorio, 52, was seen with his alleged secret lover Dr Wendy Piatt during a business trip to Singapore where he represented his bank.
The pair met up at his £350 a night room at the five-star Mandarin Oriental hotel, which is well known by investment bankers as a luxurious ‘no-tell-motel’ for hideaway, wild weekends with lovers.
Horta-Osorio has portrayed himself as a bank boss and family man who adheres to high moral standards. He boasted of his intention to ”lead by example” after being appointed CEO in 2011.
The bill initially raised issues over whether Horta-Osorio’s expenses were charged to the bank, which received a £23.7 billion bailout during the global financial crisis and is still 9.2 per cent owned by the British taxpayer.
Mr. Horta-Osorio, 52, was paid £8.5 million in salary and benefits last year and £11.5 million in 2014, making him the highest paid bank chief executive in Britain. Lloyds stated that there had been “no breach” of its expenses rules and that its chief executive had paid any personal expenses with his own funds.
Besides the lies that people must hide or tell each other in order to make a marriage work, how much morality do you need to lead a financial institution? In a vintage case of self-defeating, incandescent British sanctimony, the press has likened his moral crime to like taking your kids to Disneyland and watching Mickey Mouse douse himself with petrol and setting himself on fire.
Does a flawed human character mean that any shortcoming in personal morality infer that he is disqualified from running a bank in today’s highly regulated financial environment?
After all, outside of certain medieval caliphates, adultery is not illegal. Unfortunately, today’s venomous political environment surrounding banks and financial services has spilled over to personal lives. It demands evidence of penance, contrition, expatiation and exculpation from bankers who must confess that they were a litany of evil pre-financial crisis.
Horta-Osorio has already been placed in a pillory and embarrassed in the internet village square. He was forced to make a statement apologising to Lloyds staff for any reputational damage he has precipitated, but not because of the affair. He confirmed that he had no intention of resigning.
If personal scandal does not turn into a professional problem for a CEO, then he should not have to apologise for anything.
Scandals can corrode the trust of shareholders, clients and employees. But a personal scandal only truly causes business problems after you determine whose trust was diminished.
The general public perception of the CEO, and indirectly Lloyds’ reputation, has been hit. But I doubt if many customers will close their accounts or withdraw business because of it.
Treating a CEO like a politician or a religious leader -- the public face of an organisation -- makes it a vague popularity contest rather than a job.
Moral standards can creep so high banks won’t be able to staff a trading floor.
Peter Guy is a financial writer and former international banker