The almost obsessive attempts by bank executives to augment their bonuses have removed any illusion about what it takes to be a responsible leader, says Claude Baumann in his essay for finews.first. This behavior is discrediting an entire profession.
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The Swiss banking and finance industry has been undergoing profound change for almost a decade now. At the outset, it is all about consolidation, transparency and digitization. An altogether different development is becoming apparent only through its excesses though, as the discussion about the compensation of Credit Suisse Chairman Urs Rohner shows. But the true issue behind ever higher wages remains in the dark.
With the consequence that an entire profession has been discredited because of a few greedy exponents of the Swiss banking industry. Or put in another way: we lack bank managers who represent their company with credibility, not simply in a strategic sense, but also from a moral perspective. People willing to be role models and happy to take responsibility. And what that means was aptly expressed by Robert Holzach, the former chairman of Union Bank of Switzerland (UBS) almost a quarter of a century ago.
«Many executives should better not feel the call to be a banker»
At the annual general meeting of UBS in 1988 he said: «As a banker, only if you leave behind the world of sheer service provision and the role of a mere operator, will you live up to your entrepreneurial responsibility.» And through this he also indirectly made clear that many executives should better not feel the call to be a banker. But that’s exactly the case today.
Numerous executives, especially in finance, embrace platitudes and thus stick to the illusion of being in control of things, as several of Urs Rohner’s quotes proof: «We did a good job», «The to and fro about the bonuses in the end is a question about philosophy» – and, a quote almost ready for the history books: «Personally, we have a clean vest.»
«The finance industry lacks a clean and honest approach to doing business»
Now that’s sheer cynicism. Holzach was much closer to the truth when he noted in 1986: «He who has a clean shirt doesn’t need a clean vest.» What the finance industry today lacks is a clean and honest approach to doing business. Many people in charge instead believe that the goal of their own endeavors is to maximize their salary, while their performance is found wanting. Holzach called the people who make more money from money alone «numismatic bean counters».
It comes as no surprise that the general public has lost its faith in those people given these premises. Taking responsibility, and that’s what it is all about, is a higher duty to identify with a company even taking the major and side effects into account, according to Holzach. A sense of responsibility leaves no room for carefreeness.
«There is not even a hint of a long-term perspective left»
Citing Robert Holzach makes you liable to being accused of glorifying the past. But that surely isn’t the point. Nobody claims that previously there were no mistakes made. But there was a different approach to business prevalent within the executive suites of the companies. The sense was one of passion, empathy as well as determination and motivation to do a great job – and amplified by a sense of community spirit. And that is exactly what’s lacking today. It rather seems to be about how to tactically make it through the quagmire.
If you consider the all-too-frequent changes of strategy and nicely worded statements, there is not even a hint of a long-term perspective left. Or as the former UBS chairman put it: an undisturbed relationship to the values beyond demand and supply is the minimum requirement for a banker in the context of his business responsibilities.
Claude Baumann is Editor-in-chief of finews.ch and finews.asia based in Singapore. He used to write for Weltwoche and Finanz und Wirtschaft. He also co-founded the publishers Nagel & Kimche and launched the business travel magazine Arrivals. He’s the author of several books on the banking industry.
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