Monday, 28 January 2008

Taking responsibility

I spent a jolly few hours this weekend reading a rather thick board report. Apart from the usual performance and strategy issues, most of the paperwork was devoted to audit and compliance reports. I have never claimed to be an expert on the complex laws and procedures relating to investment trusts. But, at the end of the day, I fully realise that I am liable for the accuracy of, for example, our upcoming annual report and accounts to shareholders as well as the frequent notifications to the Stock Exchange. I therefore take my duties very seriously and read every word. But, most importantly, I have a list of questions for our external auditors and the people responsible for ensuring that our internal procedures are adhered to.

I realise that no court of law would expect me to know every detailed rule or the details of every company transaction. But I know that any court of law would have expected me, as a director, to have taken every reasonable step to ensure that the controls were in place and were adhered to to avoid the company breaking any rule. If they were found lacking, I realise that the punishment for me could be severe. At worst a jail sentence or heavy fine. But even an investigation of which I was aquitted could ruin my career as a director – whatever the outcome - as well as having a detrimental effect on my own quality of life.

I say all that because I am just getting really fed up with politicians who seem to imply that such responsibilities should not apply to them. How many directors would even dare to suggest as a defence that they were too busy to know what was going on or didn’t take steps to ensure that they they had people on their teams whose job it was to know the rules and report on their adherence? If Govt Ministers can’t set up the simplest of control/compliance procedures over their own donations then what hope do they have in doing the same in the biggest offices of state? By the way I know quite a few businesses that are required to undertake full audits on turnovers of c£200,000 – roughly the total of donations that Peter Hain doesn’t seem to know anything about. Indeed, how many of us would even dare to suggest similar excuses for errors on our tax forms? Even at the level of benefits claims, Peter Hain’s own department used the slogan “No ifs, No buts” in their campaign of zero tolerance against people making erroneous benefits claims.

As you might guess, I have no sympathy towards Peter Hain. Perhaps what is wrong is that too few MPs have any real experience of business. How many have had to face up to the liabilities of being a company director before entering Parliament?

Perhaps if they had, they’d take their responsibilities a little bit more seriously.

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