THE WALKER REPORT -- a failure of nerve or a failure of understanding?
This last week has seen the publication of the Walker Report – the report commissioned by the Prime Minister in February to act as the pathfinder for changes in corporate governance in the financial sector.
Much had been anticipated of it as a guide to how things might change. In publication it bitterly disappoints.
The Press – tabloid and broadsheet – concentrated on the headline issue of the decision of the report’s author not to require banks name individual employees receiving large bonuses. Criticism of bonuses has generated much heat and little light -- it is a side issue, even though it may be an inflammatory and offensive one. Since the report refused the bait on that one the Press rapidly lost interest – and rightly so, since the Walker Report is a damp squib; eminently forgettable as to its main thrust.
Walker has muffed an opportunity to make real change in matters which do mean something – the mechanics of corporate governance. Either because he fails to understand what corporate governance is or, more likely, because he can see no reason for change since he has been too long on the inside looking out, Sir David Walker has produced an anodyne that will have no real effect. A report has been commissioned from one of the Establishment; he has reported. The conclusion is that no one is fundamentally to blame. The system is all right really -- it just needs some tinkering. Something has been done (but not anything worth while); the masses can go back to sleep while their grandchildren pay for the mess.
Recommendation after recommendation is nothing more than a description of what the current system already requires of actors in the corporate governance dance, with an occasional exhortation to take things more seriously. It is evident that most of them will not be: on the draft published on the Treasury website there is even the cryptic inclusion of a recommendation heading (No. 15) for which the text has been deleted; the authors evidently could not be bothered to re-number the recommendations or the thing was brought out by the Treasury with such disregard for its intended effect that they couldn’t be bothered to make it look workmanlike.
This sloppiness typifies the report. Either Walker’s took his remit lightly (which might be thought unlikely in a man who has a first class degree in economics from Cambridge; was deeply involved in sorting out Johnson Matthey Bank and sits on the boards of several prestigious international financial businesses) or his nerve failed him when he contemplated what he ought to recommend. Badly written, with poor punctuation and grammar, the work resembles in its clotted syntax a report written by someone who grapples with the concepts of governance.
In the first issue of the newsletter “Governance and Disclosure”, to be published from this website later in December, the report will be analysed recommendation by recommendation.
29/11/09
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