City bosses warn of eroding trust in British politics and business

The political and business elite have a duty to set an example of high ethical standards, City of London bosses say following Britain’s ‘partygate’ scandal and the ousting of Credit Suisse chairman .

The FT’s City Network, a forum of more than 50 senior finance, business and policy-making executives, has warned of the danger that a lack of responsible leadership poses to society.

Simon Walker, chairman of the Trade Remedies Authority and former non-executive senior director of the Department for International Trade, said “the behavioral tone of an organization is set from the top.”

He pointed out the dangers of “blatant cynicism which implies that the rules can be ignored or only apply to ‘little people’. . . cavalier behavior about relative trivialities can quickly infect attitudes toward fundamentals and bring the whole edifice down”.

Norms championed in the business world are lost in politics, according to the network. Lord Mervyn Davies, Britain’s former trade secretary and board veteran, said there was “no escaping the fact that if certain events in political circles had happened in business , major disciplinary action would have been taken immediately.”

He predicted that “anger and resentment will grow in society if you see leaders adopting a moral and ethical code different from normal life”, and called for “a different type of leadership from politicians”.

“Set the tone from the top, live the values ​​and show the kind of leadership we expect from you; otherwise you are damaging our country in the long term and setting a bad example for today’s youth.

Mervyn Davies: ‘Anger and resentment will increase in society if you see leaders adopting a moral and ethical code different from normal life’ © Edward Wong/SCMP/Getty Images

More than a dozen Tory MPs have publicly called on Prime Minister Boris Johnson to resign following accusations that he and his Downing Street team held parties during Covid-19 restrictions that banned social mixing.

António Horta-Osório resigned as chairman of investment bank Credit Suisse last month after repeated breaches of coronavirus quarantine rules.

Former Tory Prime Minister Sir John Major warned on Thursday that “no government can function properly if its every word is treated with suspicion”, while Tory business donors such as Lord Michael Spencer, also raised concerns about the Johnson Diet.

Steve Hare, chief executive of software group Sage, said the UK was “looking for leadership now”.

“I think there are times when leaders need to stand up and be counted. . . what that means is that we get distracted from the things that really matter,” he said.

António Horta-Osório

António Horta-Osório resigned as chairman of investment bank Credit Suisse last month after repeated breaches of coronavirus quarantine rules © Andy Rain/EPA

Business leaders said there was a need for strong leadership, especially in times of crisis and political upheaval in many parts of the world.

Former BT and KPMG chairman Sir Mike Rake also said there “seems to be more, albeit imperfect, accountability for business leaders than for politicians” at present.

“It’s simple: Rule 101 of leadership is ‘Leadership by example’.”

He feared that an imitation of populist and authoritarian regimes by Westerners would lead to “a disenchantment by the population with institutions and even with democracy and the purpose of the vote. . . I need not elaborate on the problems we face in our disunited kingdom”.

Network members were clear that leaders should set the global level of standards for an organization or government.

Hare said those in positions of responsibility in business or public service need to “think deeply about the shadow they are casting”. He said when leaders fail to meet expectations “it fuels the atmosphere of distrust and division.”

Mike Rake

Former BT and KPMG chairman Mike Rake said there “seems to be more, albeit imperfect, accountability for business leaders than for politicians” © Chris Ratcliffe/Bloomberg

Amanda Blanc, chief executive of Aviva, said leaders are only as good as the trust placed in them.

“Although leaders always make mistakes, they must lead with integrity and demonstrate the behavior they expect of all others.”

She warned that a loss of trust in leadership could lead to an increasingly polarized society.

“The risk of this polarization is particularly difficult because the challenges facing society today require higher levels of collaboration than ever before. If leaders expect to be followed, they must provide a reason to believe.

The loss of trust has wider implications, according to several city bosses. Sir Douglas Flint, chairman of fund manager Abrn, said a functioning democracy required trust in its leaders.

“Once that trust is broken and compliance with restrictions/rules is seen as a personal choice,” he said, “a rules-based system cannot work and a community sets its own rules by through social pressure, a growing concern in a world of aggressive social media pressure.

Paul Drechsler, chairman of London First, the lobby group, said the threat to democracy around the world had never been greater given the rise of populism.

“Leadership is about upholding the highest standards of integrity and setting clear expectations about the culture, values ​​and behaviors we all want to see.”

Stephen Jones, vice-chairman of banking start-up OneBanks, said leaders in business, politics and government can only lead by ‘demonstrably adopting’ the standards they expect of those they lead .

Jones resigned in 2020 as head of banking lobby group UK Finance over inappropriate comments he allegedly made about financier Amanda Staveley in 2008.

He used this as an example of how leaders needed to take responsibility for their actions.

“My comments were inappropriate when I made them, and they were still inappropriate when deliberately used to undermine me many years later. And they were totally inconsistent with the example I was rightly expected to set internally within my organization, and publicly. Good cop.

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