It's good to talk...

It’s good to talk

I hadn’t planned to return to the topic of the bankers quite so quickly but the controversy surrounding Sir Fred Goodwin’s pension has dominated our business news agenda.

This blog is not about my opinion on the rights and wrongs of the pension payment itself – I don’t feel qualified to lecture anyone on that particular topic.  But I do feel qualified to talk about the communication and reputation challenges that both the Government and Sir Fred are currently facing.

In some ways, Sir Fred’s position is the easier and the clearer.  He plainly feels that the pension is his right and sees no reason why he should volunteer to reduce or refuse it.  

However, his personal reputation is being damaged by much of the coverage – the tabloid media in particular are “gunning” for him – and the pressure will mount for him to do, what many people, will describe as the right thing.

I don’t know Sir Fred, but I suspect he is weighing up two “right things” – the right thing to try to repair his damaged reputation, and the right thing for himself and his family.  

His personal brand is already damaged – and is likely to remain so even if he walks away from the payment.  So his decision is just a personal one.  How strongly does he feel that he has earned the money and can he live with the damage to his image? Those are the questions he has to answer.

The Government position is much more complex than many people are suggesting – even some ministers.  On the face of it, the Government can refuse to pay the pension, and attempt to court popular support in the process.

But there’s the tricky matter of Sir Fred’s contract and the precedent that would be set in terms of employment law and pension entitlement to overcome before the pension could be refused.   

It seems as if the public outcry over the almost £700,000 pension is dictating the Government’s desired outcome.  Indeed, with the tabloids baying for Sir Fred’s blood, politicians on both sides of the house have been courting public opinion and attempting to score political points.

The difficulty facing Government is that they could be damned if they do and damned if they don’t – they will be seen as culpable either for allowing the payment itself or for the dubious precedent it sets should it be withheld.

I said this blog would not include my personal opinion on the payment – and it won’t. But from a communications point of view, the biggest reputational damage is done to both Government and Sir Fred if the payment is made.  And the best solution for both parties is for an agreement to be reached rather than a long-drawn-out legal battle.   

It’s time to talk people,

Comments

[Derek Hodge]

The government won't do anything that Sir Fred could challenge in court.

There would be so much dirty washing on display that it's just not going to happen.