Corporate Governance RBS

The rise and fall of the Royal Bank of Scotland is characterized by poor corporate governance which allowed for the complete dominance of the executive management over the board of directors and a massive principal-agent problem. Positive social dynamics and the power of weak ties allowed for compliance while intimidation and bullying tactics silenced questions, concerns and opposition.

The board’s utter compliancy and borderline negligence enabled rampant, unchecked empire-building at the cost of shareholder value and led to a spiral of unaccountability and gross incompetence. Stakeholders’ loss of confidence from misinformation and misdirection was an inevitability that sealed RBS’s fate. The Royal Bank of Scotland (RBS) Group is a publicly traded firm that began its ascension as a global banking entity under the leadership of Sir George Mathewson1. In 2000 RBS was able to secure a hostile of the National Westminster Bank2,3 leading Mathewson to seek a successor to lead the integration of NatWest.

Don't use plagiarized sources. Get Your Custom Essay on
Corporate Governance RBS
Just from $13/Page
Order Essay

He found one in his then-deputy CEO Fred Goodwin. There are two main corporate governance issues associated with this turnover in leadership. First of all, the issue of succession. The board is responsible for appointing the CEO4, yet it is obvious Mathewson had significant influence in the decision5. The board exists to avoid principal-agent problems and appointing a value-creating CEO is an important task yet here we see them taking an auxiliary role in the succession process. This was not immediately problematic as Goodwin seemed a reasonable choice
however it set the tone for the firm’s dynamics early on. The second and more concerning corporate governance issue was Mathewson’s transition to chairman of the board. As CEO the firm had Goodwin, a hand-picked similarly-expansion-minded6,7 successor to Mathewson, being monitored by Mathewson himself as chairman8. The board’s ability, or perhaps desire, to curtail the actions of executive management was severely impaired with this decision. 1 “George Mathewson. ” Bloomberg Profiles.
<http://www. bloomberg. com/profiles/people/1520726-george-ross- mathewson>. Accessed 16 November 2014. Online. 2 Dey, Iain andKate Walsh. “How Fred shredded RBS. ” Sunday Times. 8 February 2009. <http://www. thesundaytimes. co. uk/sto/business/article148906. ece>. Accessed 17 November 2014. Online. 3 Inside The Bank That Ran Out Of Money. Colin Murray. BBC, 2011. Film. 4 “Corporate Governance” RBS. <http://www. rbs. com/about/corporate-governance. html>. Accessed 17 November 2014. Online. 5 Inside The Bank That Ran Out Of Money. Colin Murray. BBC, 2011. Film.

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
Live Chat+1(978) 822-0999EmailWhatsApp

Order your essay today and save 20% with the discount code LEMONADE