The furore over the closure of former Ukip leader Nigel Farage’s bank account at Coutts, owned by NatWest, has lessons for HR, employment law specialists argue. So is there really more to the saga than just a personality-focused media frenzy and a breach of client confidentiality? Adam McCulloch examines the arguments.
A Daily Express headline sums up one side of the debate: “Woke bank bosses warned by Rishi Sunak they could be shut down over closed accounts.”
And the first line of the accompanying story: “Rishi Sunak fired a warning shot at ‘woke’ banks last night by making it clear he will ‘take the action necessary’ to protect freedom of speech.”
Farage himself is quoted in the Daily Mail saying he was “cancelled” because he did not “fit their diversity and inclusion agenda” and warned that some businesses were now “basically campaigners for social change”.
The accusations of “wokeness” stemmed from an internal Coutts report, which Farage obtained through a subject access request, that claimed he was seen as “xenophobic and racist”, repeated claims he was a fascist in his schooldays, and said his previous remarks were “distasteful and appear increasingly out of touch with wider society”. In short, he was a “politically exposed person” (PEP).
Lack of discretion
NatWest chief executive Alison Rose resigned after apparently telling BBC reporter Simon Jack at a charity dinner that Farage was actually deprived of his bank account because of his failure to meet certain financial criteria. It is easy to see that such a lack of discretion from a leading banker would lead to them not remaining in their post for very long.
Financial sector
IFS study points to growing wage inequality
MPs launch sexism in the City inquiry
Yet the pressure on her to resign appeared more to do with a perception of the bank’s views than her indiscretion.
It was curious to see the prime minister and other senior Tories offer such strong opinions on the issue. After all, in March 2022 the government demanded the resignation or sacking of P&O Ferries chief executive Peter Hebblethwaite after he admitted to unlawfullly making hundreds of workers redundant. Nothing happened – no one resigned and ministers stopped asking for it.
The difference may lie in the fact that the government is still a major shareholder in NatWest with a 38% stake. In the case of P&O Ferries there was no such leverage, although the government does have business partnerships with the firm’s owner DP World – which have not been dropped.
On Thursday 27 July the Farage controversy claimed its second victim with the resignation of Coutts chief executive Peter Flavel and the prime minister and other ministers are now adding fuel to the fire by putting pressure on Howard Davies, the chair of NatWest, to resign. Farage has said the whole NatWest board should go.
Sunak said: “This isn’t about any one individual, it’s about values – do you believe in free speech and not to be discriminated against because of your legally held views?” So it’s not about client confidentiality?
For employment specialist Catriona Watt at Fox & Partners, Rose did not have cause to resign so soon.
She says: “The public has to uphold trust in banks in terms of protection of personal information and so it may be that in making the statement to the journalist, Alison Rose breached her employment contract and the fiduciary duties she owes. In the normal course, an issue like this, if alleged, would be thoroughly investigated before any action taken. Alison Rose would be entitled to take advice, to give her side of the story, and a decision would be taken about further action. In fact, she stepped down – and the CEO of Coutts has now done likewise – before further action was taken.”
Watt points out that “it is usually open to private companies to refuse to take on clients if they feel their respective values are significantly misaligned. The complicating factors here are that Nigel Farage was already a client, Coutts is a regulated entity and owes certain duties in that regard including in relation to governance and oversight, and it is owned by Natwest which is partially owned by the government. This, however, does not have much to do with Alison Rose and it is likely that the board of Coutts itself is more closely involved in this issue.”
Client information is paramount
Rose’s disclosure of confidential client information to a journalist may already have been in the public domain as speculation swirled around Farage’s own statements (he had announced on social media in June that the bank had told him their decision was a commercial one).
Watt says: “In her senior role, it is likely that protection of client and business information, and personal data are paramount. The reasons for Alison Rose stepping down appear to be more about disclosure or misuse of personal information than aspects to do with comments on Farage’s political views. The CEO of Coutts will be more closely connected to allegations of not putting the customer first, poor governance and oversight and providing incorrect information.”
Stephen Moore, partner at Ashfords, reminds us there is an issue around protected beliefs here: “Customers can be discriminated against based on their religion or belief, but does that include their political beliefs? Generally speaking, supporting a specific political party does not constitute a protected belief. A belief in a political philosophy – if that impacts how someone lives their life – may be protected depending on the facts.” It is certainly the case that although Farage’s views may be anathema for many, he has never been charged, for example, with hate speech.
Moore advises that HR professionals should take note of the saga: “The key result of this episode is for HR professionals to be more vigilant of these issues since the scandal, and should be cautious when taking any action against an employee when their political stance is a relevant consideration. Where there is a breach of confidential information then this is likely to be followed by disciplinary action.”
So there are several strands to this story, and weighing each of them independently is difficult. Political opportunism, workplace culture and contractual obligations have collided and intersected. HR could be tempted to close ranks and say “nothing to do with me” in the face of such potent forces. But to some extent, HR and all it holds dear is in the target sights of those shouting “woke!”
Ann Francke, the chief executive of the Chartered Management Institute, writes in the Guardian that Rose is exactly the type of empathic and authentic leader the UK needs. She adds: “Rose is an active advocate of inclusivity and purpose in UK business. She lent her name to, and drove, the government-commissioned Rose review, which examined how to get more women into business. She demonstrates the kind of forward-looking leadership the UK should be looking to develop and celebrate: combining commercial effectiveness with modern inclusive practice … It seems that her support for this agenda too has come under heavy criticism.”
‘We want our workplace to be inclusive’
The idea that employers should value diversity and inclusion is not unusual. The Bank of England website states: “We value diversity and inclusion for many reasons. We want to reflect the society we serve better. We want the best people to work for us. We want our workplace to be inclusive. We also want to encourage diverse ideas, open debate and perspectives that challenge prevailing wisdom.”
The Financial Conduct Authority similarly states: “Diversity and inclusion are critical to our work on culture and governance, particularly for boards and senior management.”
The government’s own Competition and Markets Authority’s Equality, Inclusion and Diversity strategy includes the words “equality, diversity and inclusion are essential to the way that we operate, both as the UK’s competition authority and as an employer”.
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
All government departments’ websites contain similar words. It seems the “woke” banks have broad support from Westminster – except for when they don’t.
Latest HR job opportunities on Personnel Today
Browse more human resources jobs
