Royal Bank of Scotland’s Hester No Fool

 Royal Bank of Scotlands Hester No Fool

THE PR VERDICT: “D” (PR Problematic) for the UK government. (Pictured: Royal Bank of Scotland’s Stephen Hester)

Government, it seems, is no match for bankers and executives who run the world’s most powerful financial institutions. The world got another reminder of this on Wednesday when Stephen Hester, Chief Executive of Royal Bank of Scotland, abruptly tendered his resignation. The news might have slammed Hester as another wealthy banker too arrogant to work under government supervision. Instead, Hester left his post like a hero, with lavish praise from the folks who fired him and the admiration of shareholders.

News of his departure sent the stock down, triggered headlines about bereft employee morale, and prompted a Treasury minister to address the UK’s House of Commons with a statement full of hyperbole about Hester’s success at getting the job done.

The reason for the departure? Apparently the government wants to “turn the page” on RBS and divest itself of the business it bailed out. Investors in a privatization deal will not view Hester’s leadership favorably, reckoned the bureaucrats. Instead, so their thinking goes, the market wants to see a leader who represents the future, not the past. Fair enough but for the unanswered questions: Who is Hester’s replacement? And if he’s as good as you say, why show your most capable leader the door? Why not let him help you through the “transition?”

THE PR VERDICT: “D” (PR Problematic) for the UK government for badly mishandling an announcement with a communications strategy that begs many questions.

THE PR TAKEAWAY: Before firing, have a replacement lined up, or suffer the consequences. The RBS privatization has a chance to succeed, but the government just raised its cost of capital unnecessarily by showing the current CEO the door, with no apparent plan for replacement. Once the press statements were finalized and the polite, politic resignation letter released, Hester told the truth that he’d wanted to stay after all. While he got to appear as though he’d orchestrated an effective career transition, Chancellor of the Exchequer George Osborne et al were left holding a bag of empty words. Next time, think before you pink slip.

 Royal Bank of Scotlands Hester No FoolPRV Contributor Pen Pendleton is a communications professional with 20 years experience in business and financial public relations. He began his career as a newspaper reporter and now works as a consultant in New York. 

Stripped Knighthoods and (Sir) Fred Goodwin

goodwin 224x300 Stripped Knighthoods and (Sir) Fred Goodwin

The PR Verdict: "A"

The UK’s papers are gleefully reporting that Fred Goodwin, former CEO of the Royal Bank of Scotland, has been stripped of his knighthood.

The decision, formally taken by the Queen, follows weeks of public debate and the private deliberations of government officials. Knighthoods are rarely rescinded unless the person has been found guilty of a criminal offence or has been stripped of his/her professional status by a regulator. Goodwin was an exception.

The former CEO joins an embarrassing list of rescinded knighthoods.  The most mentioned is Robert Mugabe, who continues to run Zimbabwe into the ground.  Goodwin wisely declined any comment.

The PR Verdict: “A” for Fred Goodwin and his decision to stay silent.

Goodwin might have been tempted to defend himself, cloaking his comments in a discussion about setting the record straight for his family. But given the widespread support across all party lines and the unanimous media cheering the best move was to say nothing. With his former bank effectively nationalized and bailed out in excess of 45 billion pounds, his public rehabilitation seems far off.  In a case like this his only hope is that time will change perspective …or he may to consider an appearance in next season’s I’m a Celebrity Get Me Out of Here to show viewers a more redeeming side.