Despite the headlines here, I’m not sure how much resonance the Nigel Farage and Coutts case has outside the UK. To summarise for non-UK readers, Farage, the right-wing politician who played a major role in Brexit, got his bank account with Coutts closed. Coutts is part of the NatWest group now but historically was a bank for the rich and “upper class” folk. (I met a guy recently who told me that when he started his military officer training at Sandhurst some 45 years ago, straight from school, the youngsters were instructed they had to open a Coutts account in order to be paid!)
Anyway Coutts firstly claimed Farage didn’t have enough assets his account to justify his account, but he then asked to see what information the bank held about him, and a 40-page document came to light which basically said he wasn’t a very nice person and didn’t share Coutts’ values. (Why that document hadn’t been shredded weeks ago is beyond me…)
The NatWest and Coutts CEOs have now resigned and the whole case is another element in the backlash we are seeing against “purposeful business” and what some people see as “woke” attitudes becoming too prevalent in business.
My politics are not at all Farageist but I was on his side actually in this case. Banks making pretty random value-judgements about individuals and cutting them off from banking if they don’t like their views is not acceptable. What if in the future the establishment or a strong ruling party in the UK became anti-gay or very pro-religion? Might I lose my account because I’m a humanist and support gay marriage? Some people say that businesses can choose who they accept as customers, but that is only true up to a point, particularly in regulated industries. Banking is a pretty fundamental service, it’s not like saying “I don’t want you in my pub” - what if water, electricity or internet providers decided they wouldn’t accept certain people as customers?
But what annoyed me most is that Coutts were not thinking clearly about why businesses should be doing more in terms of purpose, diversity and inclusion. In my Procurement with Purpose book I talk about the need for action in the sustainability and ESG field to be driven by stakeholders – chiefly investors, customers, staff, regulators and government.
I suspect Coutts is trying to appeal to the new generation of millionaires, as likely to be footballers, tech entrepreneurs or YouTube influencers as landed gentry. Perhaps that was a driver here – thinking those people would not want to see Farage metaphorically queueing with them to pay in a cheque…
But does Coutts really think their customers were demanding Farage’s expulsion? Does anyone choosing a bank really think “I wonder if any of the other customers are not very nice people who don’t share my values?” Of course not. You wouldn’t choose the AA rather than the RAC for road rescue services because you’ve heard some anti-abortion campaigners (or pro-abortion for that matter) have joined the RAC. Or shop at Sainsburys because some local fascists tend to go to Tesco.
So it feels like this was more about making Coutts’ own senior managers feel good. Now staff are stakeholders when it comes to business purpose – but their views should not take precedence over customers and investors. Staff can put their views forward about which purpose-related initiatives they would like their business to pursue, but as I have said many times, this whole agenda should not be primarily about making the Board feel good about themselves.
If Coutts and NatWest are really looking to show that they have values that attune to today’s society, there are many actions they can take. In terms of diversity and inclusion, make sure they employ (and promote) staff across the whole range of individual characteristics, backgrounds and experiences. Go out of their way to take on apprentices and graduates with a non-privileged background. Implement a supplier diversity programme.
Indeed, I see that Coutts is now registered as a B Corp and has some good stories to tell on its website. But NatWest carries on closing branches, which affects the old, the disabled, the less technologically savvy more than anyone. A couple of years ago they stopped providing trust accounts, which were useful for the parents of disabled and disadvantaged kids. So there’s a certain amount of hypocrisy here.
But the episode is also very disappointing because it is adding fuel to the arguments of those who are trying to push back on the whole purpose and sustainability agenda. We have a Prime Minister who now says he is “on the side of drivers” (what a deeply stupid thing to say – like many, at different times, I’m a driver, a pedestrian, a cyclist, and a regular user of public transport). Others argue that it is white middle-aged men who are the oppressed minority, and some people are now seeing an opportunity for their 15 minutes of fame by being perceived as anti-“woke”, anti-net zero and anti the diversity agenda.
So it is more important than ever that firms implement business purpose sensibly and thoughtfully and don’t play into the hands of its opponents. And if the Farage fiasco stops the banks from denying thousands of people accounts, often without any explanation (which has been happening in recent years), then this will prove to have been a positive – if ridiculous – furore after all.