The finance watchdog has exposed serious flaws in how City HR teams vet candidates for top banking jobs.
Since December, the Financial Services Authority (FSA)has scrutinised applications for senior roles such as chief executive, finance director or risk director at financial institutions,to question candidates’ claims of experience and knowledge. Out of the 51 candidates viewed, FSA chief executive Hector Sants said last week a number of applicants had pulled out of the running for top jobs due to concerns the FSA had raised “concerning the candidates’ fitness and propriety”.
Charles Cotton, reward adviser at the Chartered Institute of Personnel and Development, said the FSA’s involvement in the recruitment process, which had led to inappropriate candidates pulling out,showed HR wasn’t doing its job properly.
He told Personnel Today: “It may be the case that HR has been putting people forward without carrying out suitable checks, in which case this interventionist attitude by the FSA is necessary for the employer. It may be that HR hasn’t had time to update its recruitment vetting procedures to reflect this, or that the FSA has just moved faster than employers to tackle this problem.”
He added: “Perhaps [City] HR departments will look at what the regulator focuses on and make it part of their vetting process before the interview stage, to prevent the FSA from having to intervene further.”
Senior executives at Northern Rock, HBOS and RBS were found not to have banking qualifications in the wake of the financial crisis, which might have exacerbated problems at the financial institutions, Cotton added.