A complete red herring’ writes Mannie Sher in The Guardian in a letter about how our society manages risk, with Alison Gill.
RBS: Biting the hand that feeds:
‘The focus on restricting bonuses in an attempt to regulate bankers’ behaviour is a complete red herring (RBS warns that bonus cap will force best staff to quit bank, 3 December).
It is ironic that shareholders, individuals and the government want bankers to take risks on their behalf to increase profits, yet insist on berating bankers when they want rewards for doing so, or the risk turns bad. It is a Faustian pact that leads government and the public into arrangements with risk-takers, so that they don’t have to deal with the fears of risk themselves.
So, if we object to paying others to manage risk for us, the real question is how do we manage risk between us and address the consequences of risk collectively? In our annexe to the Walker review, we have addressed the attitude, motivation and behaviour that leads to consistent breaches of regulations.We believe a structure should be established to ensure dialogue between shareholders, bankers and the general public. It is a failure to communicate acceptable boundaries that leads to deviant behaviour. Experience has shown that regulation without dialogue only serves to encourage those responsible for risk-taking to find ways around obstacles.
Alison Gill, Crelos and Mannie Sher, The Tavistock Institute of Human Relations
The Guardian: 4 December 2010.
Letters in the business pages on executive pay and bonuses
Click here to access the Guardian website.