Which would you choose, if you were a politician? Go for the quick soundbite and a 30 second slot on the Six O'clock news or do what's right, in the interest of your country?
Consider:
You are a finance minister and there is a global banking crisis with confidence in the whole economic system, on a knife edge. The Finance Sector is a major component of your country's economy. The largest bank in your country faces insolvency and this would have a catastrophic effect on the whole financial system. A major contribution to this particular local situation is that this bank over-stretched itself with an overseas acquisition but you worry that the light and 'hands-off' regulatory systems, that you allowed to exist, might also be a contributory factor.
So you inject a very significant sum of taxpayer money, into the bank and take a substantial shareholding. You decide that it would be best if the semi (largely) state-owned bank be managed at arms length rather than become part of any ministerial portfolio, though you do push for the exit of the bank's CEO. You put in place such an arrangement for the management of the taxpayers investment. You, along with the bank's board, negotiate with a suitably qualified banking executive. Someone not caught up in the immediate crisis but who 'made his bones' in banking. You agree contractual terms and set targets etc. and then step back.
Get into your personal Tardis
Now Fast Forward 2 years
You are in opposition. The recent election sees the electorate lay a charge of economic mis-management, at your party's door and they kick you out of office. However, they are swayed by the charm and rhetoric of a smaller party and so the election result is that this minor party gains a seat at the big table and participates in the coalition government that is formed.
Back into your personal Tardis
Fast Forward 2 years
In spite of the government initiating austerity cuts, your party is languishing in the polls and many lay this at the door of your lacklustre leader. The earlier mentioned banking executive is making good progress at the bank and achieving the targets that are set for him, by the Board of Directors. Under the terms and conditions of the contract of employment, which you and your colleagues either directly negotiated or approved, he is entitled to a performance related bonus. The government that succeeded yours, imposed a blanket ban on large cash bonuses and so the bulk of his bonus must be in shares that vest over a period of term. Technically that may be a breach of his contractual terms but he doesn't complain - he is in it for the long run.
Do you as an opposition MP or Shadow Cabinet Minister throw hypocrisy to the wind and use the compensation package that your party agreed to, when in power, as a stick to beat the recently elected government, or do you support the individual that you selected and find the words to placate the mob whose fury has been whipped-up by a sensationalising media?
Consider also.
You are part of the newly elected government. The majority political philosophy is founded on the support of trade and business and less intervention from government in the business sphere.
Given the above scenario, do you
Support the executive and say that his compensation is a matter for the Board of Directors? Pointing out, as you do so, that the employment contract was negotiated by the previous administration. Also that by forcing boards to ignore legal contracts we bring into question the foundations on which our society is built!
Do you throw the executive to the baying mob, pressure him into forgoing the bonus, while at the same time pointing out that the employment contract was agreed by the previous administration, etc.. At the same time ignoring the risk to your party's and your country's reputation.
Now
and finally
Consider:
You are a finance minister and there is a global banking crisis with confidence in the whole economic system, on a knife edge. The Finance Sector is a major component of your country's economy. The largest bank in your country faces insolvency and this would have a catastrophic effect on the whole financial system. A major contribution to this particular local situation is that this bank over-stretched itself with an overseas acquisition but you worry that the light and 'hands-off' regulatory systems, that you allowed to exist, might also be a contributory factor.
So you inject a very significant sum of taxpayer money, into the bank and take a substantial shareholding. You decide that it would be best if the semi (largely) state-owned bank be managed at arms length rather than become part of any ministerial portfolio, though you do push for the exit of the bank's CEO. You put in place such an arrangement for the management of the taxpayers investment. You, along with the bank's board, negotiate with a suitably qualified banking executive. Someone not caught up in the immediate crisis but who 'made his bones' in banking. You agree contractual terms and set targets etc. and then step back.
Get into your personal Tardis
Now Fast Forward 2 years
You are in opposition. The recent election sees the electorate lay a charge of economic mis-management, at your party's door and they kick you out of office. However, they are swayed by the charm and rhetoric of a smaller party and so the election result is that this minor party gains a seat at the big table and participates in the coalition government that is formed.
Back into your personal Tardis
Fast Forward 2 years
In spite of the government initiating austerity cuts, your party is languishing in the polls and many lay this at the door of your lacklustre leader. The earlier mentioned banking executive is making good progress at the bank and achieving the targets that are set for him, by the Board of Directors. Under the terms and conditions of the contract of employment, which you and your colleagues either directly negotiated or approved, he is entitled to a performance related bonus. The government that succeeded yours, imposed a blanket ban on large cash bonuses and so the bulk of his bonus must be in shares that vest over a period of term. Technically that may be a breach of his contractual terms but he doesn't complain - he is in it for the long run.
Do you as an opposition MP or Shadow Cabinet Minister throw hypocrisy to the wind and use the compensation package that your party agreed to, when in power, as a stick to beat the recently elected government, or do you support the individual that you selected and find the words to placate the mob whose fury has been whipped-up by a sensationalising media?
Consider also.
You are part of the newly elected government. The majority political philosophy is founded on the support of trade and business and less intervention from government in the business sphere.
Given the above scenario, do you
Support the executive and say that his compensation is a matter for the Board of Directors? Pointing out, as you do so, that the employment contract was negotiated by the previous administration. Also that by forcing boards to ignore legal contracts we bring into question the foundations on which our society is built!
Do you throw the executive to the baying mob, pressure him into forgoing the bonus, while at the same time pointing out that the employment contract was agreed by the previous administration, etc.. At the same time ignoring the risk to your party's and your country's reputation.
Now
- Answer this as if you were a UK Labour politician
- Answer this as if you were a UK Conservative politician
- Answer this if you were a UK Lib Dem Politician
and finally
- Answer this if you are just a decent UK citizen, who, maybe doesn't understand the complexities of the financial system nor why all of these bankers seem to get such large salaries and bonuses, but think it is important that the UK doesn't get a reputation as a place where contracts are agreed and then ignored. In short, someone with decency and a moral code that isn't swayed by the slightest of political breezes.
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