Financial Governance And Corporate Governance

1746 Words Mar 19th, 2016 7 Pages
This report provides an in depth analysis of RBS’s corporate governance failure, in order to provide the reader with the appreciation of the key role that corporate governance plays in successful businesses and in social welfare. The RBS scandal is a perfect illustration of weak corporate governance and failure of checks and balances by the required institutions which inflates from the UK government to Auditing companies. The main objective of such report is to directly address the RBS corporate governance scandal which affected a large portion of the UK economy in 2008. By doing so the writer applies relevant corporate governance theories, as he finds appropriate. In 2007, RBS stood as one of the ecosphere’s greatest private sector banks positioning fourth in the world, and ironically in 2008 was bailed out using taxpayer’s money, leaving shareholders with nothing. Those who could be considered as the main pioneers of such failure are incorrectly rewarded and should be rightly called on the red carpet to pay the consequences of their actions on the simple base of pay for performance which the writer believes to be fundamental in such business. The instant which sealed RBS 's destiny came in October 2007, with the £49 billion appropriation of ABN AMRO. The Telegraph stated that lack of the board to stop such reprehensible investment and secure the future of the bank was born from the fact that “Sir Fred wielded total power in the boardroom because for years…
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