The corporate governance of the HBOS board was a “model of self-delusion” according to a parliamentary commission.
The Parliamentary Commission on Banking Standards’ report said: “The corporate governance of HBOS at board level serves as a model for the future, but not in the way in which Lord Stevenson and other former Board members appear to see it. It represents a model of self-delusion, of the triumph of process over purpose.”
Former chairman Lord Stevenson and past chief executives Sir James Crosby and Andy Hornby came under fire from the commission for the strategy of the bank and the way the board was run.
Emphasis was placed on senior executives with corporate banking experience to devise strategy which should have been the board’s sole responsibility.
The report said: “There was insufficient banking expertise among HBOS’s top management. In consequence, they were incapable of even understanding the risks that some elements of the business were running, let alone managing them.”
The commission said it was shocked members of the HBOS board at the time of its collpase still congratulated themselves on their leadership.
“Judging by the comments of some former Board members, membership of the Board of HBOS appears to have been a positive experience for many participants. We are shocked and surprised that, even after the ship has run aground, so many of those who were on the bridge still seem so keen to congratulate themselves on their collective navigational skills.”