Vilifying Sir Fred Goodwin seems to have become a national sport this week. Every TV and radio programme, newspaper, populist politician, and pub commentator is lining up to take their shot. He should be ashamed; he should volunteer to give back his pension; etc, etc, etc.
Rubbish. The man made a mistake. A mistake of monstrous proportions admittedly, but do we really want to set a precedent of publicly punishing businesspeople for being wrong?
For a start, he didn’t make his mistake in isolation. He did it alongside, and with the support and approval of an army of subordinates, advisers, and board members. Locking on to Sir Fred Goodwin as the only one responsible, and hence the only one to pay, is ridiculous.
But even if we do decide to take just one person responsible for the failure of an empire, is it really appropriate to punish someone for an honest mistake? There’s been lots of talk of greed, but in reality Sir Fred was just trying to do the job for which he had been employed: to grow the success of the business. He failed to be sufficiently prudent in chasing growth, but that is an error not a crime. Sir Fred Goodwin didn’t set out to take down a bank and nor did anyone else in the company.
At fifty years old, Sir Fred had been contributing to his pension pot for probably almost thirty years. The headline figure of £16m may seem enormous to most of us but that’s the nature of the business he was in and the length of time he had been in it. He didn’t make the rules, he just succeeded at playing the game — right up until a few months ago.
The relevance to the future? In this country we are not good at encouraging, supporting, or rewarding entrepreneurship. It is very, very hard to start and run a successful business while dealing with the bewildering level of bureaucracy. Taxes don’t necessarily need to be lower but they do need to be simpler. The huge range of ‘supporting’ organisations need to be streamlined so that it’s easier to find what you need. It’s depressing to compare the headline figures announced at government level for support and investment in small businesses with the reality of what trickles down.
On top of all this, it now seems that in public we want to snipe at the enterprising and successful, particularly when they fail. In the same way that celebrities have been built up and knocked down by the media for years, the same fate looks set to befall the business community.
This is very bad. Failure is a part of business and a bigger part of entrepreneurship. The Americans say that you’re not an entrepreneur until you have failed three times. If we publicly vilify people for their every failure, we are not encouraging that entrepreneurship that is vital to creating new jobs and overcoming this recession.
If you’re reading this Sir Fred, I have a suggestion for you that will enable you to keep all your money — in fact make more — and go on a PR offensive. Invest some of your pension directly in small businesses. This will obviously be welcomed by the businesses themselves, and with the right investments, should allow you to increase your wealth. But it would also be a good way to highlight the glacially slow trickle of cash from the public purse down to small businesses.