Today I was interviewed on Radio 4’s World at One regarding Fred Goodwin being stripped of his knighthood. We had a lively debate about whether it was right to take his honour away - I think not - and whether other people should have their honours stripped from them. The BBC interviewer pointed out to listeners that the RBS chairman did not receive his knighthood for services to banking and by implication it would not be appropriate for him to be treated in the same manner as Fred Goodwin. I did not have the time to point out that Anthony Blunt received his knighthood for services to art yet was stripped of it for spying. One person that clearly does stand out for scrutiny is Alan Greenspan.
Full transcript is below.
SHAUN LEY: Presenter
Well, Terry Smith is chief executive of Tullett Prebon, a money broker and Fundsmith, a fund management company. He’s in the City now. Welcome to the programme.
What do you make of the decision to strip Fred Goodwin of his knighthood?
TERRY SMITH: Chief Executive, Tullett Prebon and Fundsmith
I think it’s deplorable. He’s now been bracketed with traitors, dictators and convicted fraudsters. If he did something wrong, I’d like to see some proceedings against him – civil or regulatory – and then if he is found to have done something wrong, strip him then but at the moment it looks like a deplorable, political willingness to go along with the sort of morals of a lynch mob.
But honours are discretionary: there’s no real criteria for rewarding them. Why should there be any specific criteria for taking them away? If they’re given by politicians why not allow politicians in response to public opinion, to strip them from those who’ve received them?
We could do that if people wish. It would be a break with the way that this has been done in the past, of course – that’s not necessarily a bad thing – but historically, as I say, traitors, dictators and convicted fraudsters have been it so this is a complete change. If we are going to strip them at discretion for failing though, I would like to suggest to you that the Buckingham Palace probably need a rather large cupboard for returns, because if everybody who fails has to hand back their honours there’ll be a lot. If we take the specific case of Fred Goodwin, he didn’t make his decisions alone. The chairman of his board and his board helped him – the chairman, by the way, was Sir Tom McKillop – and he’s in the regulated, highly regulated banking industry where the FSA basically approved what he was doing and that was chaired at the time by Sir Callum McCarthy. So I presume if we’re going down that route, there will be a lot of other people rather than this lone individual singled out.
I suppose I should say, just in passing, that Tom McKillop’s knighthood was for services to the pharmaceutical industry before he went to banking but I think your point is well made.
Who cares what it was for?
Fair enough and on that basis, are you concerned that this might have an impact on the City, on the attractiveness of Britain for business, particularly this idea perhaps if you fail, which a lot of people do in business, even people who are subsequently successful, you’re going to get punished for it?
Yes, I think the only way to absolutely guarantee that you won’t fail, is not to try in the first place. I think it will have a bad effect on people and I think people who either aspire to receive honours for whatever reason in their career, or those who like Stephen Hester, have taken on a job in the public sector who see that something that they were contractually received is taken away for political reasons, must surely think twice about ever taking something on like this again. But going back to an earlier point: if we are going to take honours away from people because of their mistakes, could I suggest another one that should obviously be called into question?
Go on, briefly.
How about the 2002 honorary knighthood given to Alan Greenspan, the chairman of the Federal Reserve and the citation was “ for his contribution to global economic stability”. I’ll believe that people are not on a witch hunt for a single man when they proceed against Alan Greenspan and strip him of his knighthood.
OK, Mr Terry Smith in the City: thanks very much for joining us.