Dismissal of senior executives
March 23, 2009
There has been a lot of publicity recently about Senior Directors’ roles in the failings of organisations, and whether they should take responsibility personally for what has taken place.
There was outrage across the country a few weeks ago when it became apparent that Sir Fred Goodwin, RBS Chief Executive had retired on a six figure salary when his bank had come close to collapse and it was felt it had contributed to the current economic circumstances which is leaving millions of people jobless and even homeless. People could not believe that somebody that had overall responsibility for the bank and its success or failure could not only ‘get away with’ the massive failings but was essentially rewarded for it by being able to leave quietly on a small fortune. This has led to calls for new measures so that the FSA can stop these kinds of huge ‘rewards for failure’ in the future.
On the other hand is the case of Sharon Shoesmith, the former head of Children’s Services at Haringey Council was sacked without notice for the failures of the council to protect Baby P from repeated horrific abuse – after a damning report on the council’s failings was released. This is possibly the kind of action the people who were so outraged at the RBS outcome would expect a senior executive to face after such a catastrophic disaster. However Shoesmith made a claim to the Employment Tribunal for unfair dismissal, and has recently added sex discrimination to her claim – a total that could amount to over £1million in compensation if she is successful. This will be a fascinating case to watch, because of the huge publicity surrounding the case of baby P but also because of the implications of how the dismissal was handled at such a high level?
So what’s the answer? Should organisations be able to find those in ultimate charge guilty of gross negligence or misconduct after a failure as critical as those of RBS or Haringey Council? More on this in the next article!
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