Nightmare at NatWest - key learnings

31 August 2023

NatWest had some dark days and nights in late July. What are the takeaways for other Boards to ponder?

For some days in July the business world was transfixed by the NatWest Saga.

It cost Alison Rose, clearly an outstanding business leader, and Peter Flavel their jobs and left the Board embarrassed. It has triggered a wave of discussion about bank account closure, with Jeremy Hunt pressing the FCA to “get on” with their bank account closure probe. It has also added impetus to the campaign against “woke capitalism”.

Whilst hindsight is a wonderful thing, it does seem that three significant mistakes were made:

  1. Coutts created damaging documentation, including terms such as “disingenuous grifter”, notwithstanding the risk of disclosure (whether through the Subject Access Request mechanism or as a result of a leak);
  2. Alison Rose, in any event potentially in breach of client confidentiality, shared incomplete information with a BBC journalist about the reasons for exiting Nigel Farage; and
  3. the NatWest Board, perhaps overly in thrall to an inspiring leader, too readily expressed full confidence in their CEO - misjudging the depth of feeling around the nature of the mistake and the political context.

There are clearly other shoes to drop, in the form of the results of the Travers Smith investigation and a final outcome on the topic of Alison Rose’s remuneration.

But in the meantime what are the key learnings for other Boards that can be gleaned from the saga so far?

1. Documents

Coutts presented various papers to its Wealth Reputational Risk Committee, aggregating some 40 pages, which gathered together much unflattering data and comments about Mr Farage as evidence to support the decision to exit Mr Farage. The risks associated with him were felt not to be consistent with the purpose of the bank.

Inevitably, and appropriately, Boards and Board Committees need to document the reasoning which underpins important decisions. There is, however, a question of balance - and the potential for disclosure should be kept in mind. The essence of arguments for and against a given decision can fairly be captured without noting every turn along the way and without disparagement. This is particularly in point where an individual is the subject of a decision.

Large organisations of course face a challenge here, but events at Coutts and NatWest do suggest that they could usefully ask themselves whether group-wide policies around document creation and content (having due regard to applicable regulation) are clear enough and disseminated effectively.

In this context it is worth noting that George Orwell’s Six Rules for writing remain engagingly fresh

2. Escalation

Alison Rose had not seen the papers which had circulated in Coutts when she sat down to dinner next to Simon Jack, as she herself explained in her statement on 25 July. Given the prominence of Mr Farage and his public objections to the prospective closure of his Coutts account, this seems strange.

Surely something went wrong in NatWest’s processes for mitigating risk.

So the broader question is whether organisations have well-tuned processes in place to ensure that time-critical reputational risk issues are escalated promptly to the Group CEO? Coutts management should have been briefing the Group CEO about the range of underlying reasons for exiting Mr Farage as soon as he raised his concerns.

3. Don’t sit on difficult stuff

The timeline of the saga is significant.

Nigel Farage first publicised the closure of his Coutts account on 29 June, the BBC story was published on 4 July, the dossier of papers was published on 18 July, Alison Rose wrote to apologise on 20 July and the Board offered its full support on 25 July, before changing its mind in the early hours of 26 July.

This is all too leisurely (and dovetails with the escalation point). Surely alarm bells should have been ringing all over NatWest on 29 June and steps taken to work out what the full background was and what damage limitation steps were available. The agonising timeline only made things worse.

4. Watch the drafting

Alison Rose’s letter of apology was, as Oliver Shah pointed out in The Sunday Times, a tortured read:

“I am writing to apologise for the deeply inappropriate comments about yourself made in the now published papers prepared for the Wealth Committee.”

Given that first impressions count and that this was an important letter, it is hard not to recoil from the reflexive and passive phrasing of “…comments about yourself made…” and the coy omission of the words “Reputational Risk” from the title of the Wealth Committee.

There is more than Orwellian purity in this point. As Oliver Shah observes – “Someone who writes unclearly either has not thought through what they’re saying, or is trying to obfuscate, or both”.

There is a takeaway here about leaders writing clearly and well: active voice, short sentences and no gratuitous amplifying adverbs.

5. Talking to journalists

Journalists have a job to do and business leaders, in promoting key messages about their organisations, need to talk to journalists.

However, Alison Rose’s ill-fated dinner conversation with Simon Jack and the surprising confirmation the following day emphasise that “safety first” should be the bywords for business leaders, particularly where client confidentiality is potentially an issue. It is better, even in private settings, to stick to holidays, business in general and the merits of Bazball and/or the songs of Taylor Swift.

In this context I was also struck by the news earlier this month about an apology issued by HSBC’s head of public affairs. This was after he was publicly reported as saying at an event that the UK Government had been “weak” for giving in to US pressure to cut back on its dealings with China.

The event in question was a private one under “Chatham House Rules” - a convention by which participants agree that information shared cannot be attributed to a particular individual or organisation.

So business leaders probably now have to assume that Chatham House Rules will be broken. Sad.

6. Reading the tea leaves

The NatWest Board concluded that their CEO’s mistake was not a sacking offence. They felt that an adjustment to remuneration in due course and an independent inquiry into what went wrong would be the proportionate response.

As the business is 39% owned by the Government, we must assume that Sir Howard Davies consulted HMG about the Board’s proposals. Indeed he later said that he “took soundings”. It swiftly transpired that those soundings had either been with the wrong people in Government or that views had changed. Within hours Alison Rose had resigned.

There are some parallels here, as others have observed, with Rio Tinto’s response to the destruction of the Juukan Gorge rock shelters in May 2020. Following an internal inquiry into the destruction, the bonuses of the CEO, JS Jacques, and other executives were cut. This met with dismay and anger from investors who felt that it was a most inadequate response and the CEO and two other senior executives promptly resigned “by mutual agreement”.

You have to wonder why the Rio Board did not have a better handle on the shareholder pulse before concluding that a cut in bonus would suffice.

The takeaway is that some mistakes simply touch a nerve and must occasion, albeit with much regret, the departure of the CEO. The challenge for Boards is to have the foresight, and understanding of likely stakeholder response, to work out which side of the line a mistake falls.

7. Diversity


A very astute female PLC director asked me whether the outcome at NatWest would have been the same had Alison Rose been a man? I said that I thought that it would have been, in light of the touch a nerve point.

However, the fact that seasoned female directors sense that gender can be a factor at crisis moments emphasises that we still have a distance to travel in promoting and, whisper it, normalising the progression of women to senior executive roles. Whilst the FTSE Women Leaders Survey, published in February 2023, revealed that 29% of FTSE Executive Committee roles were occupied by women (a reasonable advance) it went on to observe that:

“There is no denying that real progress in the very top job in British business, the CEO role, has not happened yet. The numbers have remained flat with only marginal increases in recent years, which is disappointing, but not entirely surprising at this stage.”

We need to do better.


Commentators have observed that it is not helpful that 5 of the 7 NatWest Non-Executive Directors (“NEDs”) have a banking background. Surely, the challenge goes, this drives groupthink and so Board debate would not have benefited from genuine alternative perspectives as the Farage events unfolded.

I think that this is a bit tough. Banks are complicated, highly regulated, animals and for bank Boards to do their job of challenging management you need NEDs who understand enough to ask (and press) insightful and technical questions.

And yet, the importance of diversity of thought on Boards is a topic which receives more lip service than meaningful engagement.

In this context, I commend to you the attached article by Hermione Winterton It is a little long but repays the effort. The key points are:

  • compelling evidence, outlined in the article, supports the argument that a board with diversity of thought will be better equipped to navigate today’s corporate governance challenges;
  • recruitment processes are too often reliant on the networks of existing Board members and self-assessment. Psychometric testing should be more widely deployed as it can provide a true understanding of an individual’s and a group’s thinking style; and
  • cognitive diversity may produce less immediate representativeness than a homogenous Board but is more likely to guard against the threat of groupthink, expert overconfidence and internally generated blindness.

8. Purpose undermined?


I am concerned that events at NatWest will diminish the focus which companies bring to being led by their purpose, for fear of being accused of being “woke”. An article for the Corporate Governance Institute offers the following in this context:

“Woke capitalism is now meant as a sneer – a broad term that hints at ‘liberal elites’ and ‘right on’ activism. It is now used as a rallying call by right-wing politicians and commentators to discredit any ESG proposals relating to climate change, workers’ rights and corporate governance.”

I recognise the challenges which advocates of purpose face. It does feel a bit “right on” (remember Terry Smith’s challenge to Unilever about the purpose of mayonnaise) and can fall within the scope of green washing charges.


The reality is that a well-articulated purpose drives strategy, gives shape to capital allocation, underpins culture and motivates talent.

NatWest will get little credit for it now, alas, but its pursuit of purpose - “We champion potential, helping people, families and businesses to thrive” - has given a previously tired brand both personality and impetus over the last few years.

Moreover it is noteworthy that Rio Tinto has, as part of a drive to reshape and reboot its culture adopted a new purpose

And a thoughtful approach to purpose drives appreciation of long-term value. ESG is a term which has probably passed its sell-by date for investors but, as the excellent Alex Edman says - “Considering long-term factors when valuing a company isn’t ESG investing; it’s investing.”

So let’s keep faith in the stuff that matters.

Christopher Saul

Christopher Saul provides independent trusted advice to senior executives and key stakeholders within publicly quoted and privately owned businesses and professional service firms. His areas of focus are governance, succession and the moderation of differences.

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