Banking on high standards: New BSB boss Dame Colette Bowe is on a mission to restore trust in British lenders

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Dame Colette Bowe has never taken the easy option. She began her working life as a civil servant, and within a few years became embroiled in a scandal involving a leaked document concerning the Westland affair.

Those with long memories will recall that was a battle in the 1980s over ownership of a helicopter company that smeared Lord Heseltine, who was in conflict with her boss, Lord Brittan.

Her policy then was silence in the face of a storm that saw the media camped on her doorstep.

Did she leak the document to the Press Association on the instruction of Lord Brittan and the then Prime Minister, Margaret Thatcher? They denied it. She said nothing and left the Civil Service shortly afterwards for a stellar career in regulation and industry.

Today, interviewing Bowe about her tough new job as chairman of the Banking Standards Board in modest offices a few doors down from the Bank of England, she’s as discreet as she was then.

Would she comment on the recent headlines about massive penalties imposed on banks for rigging foreign exchange markets? She wouldn’t.

How about the possible effect of Britain leaving Europe? No.

So what drew her to the job, leading the BSB, after a recent stint chairing communications regulator Ofcom?

‘Well, I did think that it was going to be extremely worthwhile if we could all make it happen and I also thought that the experience I would bring gave it a reasonable chance of being able to make it hold.

‘I wasn’t under any illusions about the fact that this endeavour we’re all engaged on is going to be difficult.’

She made an early decision that it should be a small operation which called in people with the right expertise when they were needed.

The chief executive, Alison Cottrell, former director of financial services at HM Treasury, had been a City economist with firms including HSBC and PaineWebber before joining the Treasury in 2001.

For the board itself, she believed that two sorts of people were needed: practitioners, people from across the City – ‘We’ve got big investment banks, we’ve got a mutual, we’ve got a challenger bank we’ve got HSBC, so we’ve got, I think, representatives of most of the strands of the City’ – and non-practitioners, people who come from a range of different walks of life.

Those involved include Gillian Guy, the head of Citizens Advice, and Sir Brendan Barber, the former head of the Trades Union Congress (TUC). Other members include Paul Johnson of the Institute of Fiscal Studies and the Rt Rev David Urquhart, Bishop of Birmingham. The deputy chairman is Lord McFall who, as John Mc Fall and Labour MP for West Dunbartonshire, used to be chairman of the House of Commons Treasury Select Committee.

They are all people with a range of perspectives, views and experience – who have something to say about how the industry operates, says Bowe – and, crucially, who are good at listening.

‘The direction of travel, we hope, is to be able to produce properly grounded evidence about how the culture of this industry is being shaped,’ she says, before demanding: ‘How can we encourage more people to get professional qualifications? How can we encourage more firms to place value explicitly on professional qualifications?’

Ethics is another area of close focus.

‘We think that might be an area where we can help to put things together, maybe support a bit of research ourselves, [perhaps] a conference particularly aimed towards banking, where people could come together and talk about what really constitutes ethical practice in this industry – and how you can disseminate that to very large firms.

‘People have often talked about something called “the tone from the top”, which is tremendously important. People at the top of any business, not just banks, have to express a certain set of values by the way they do things.’

One element, she says, is whether people feel able to question practices they feel are dubious.

‘Are people confident enough to say no? I don’t think so. I’ve occasionally worked in places where somebody would have said, “I’m not sure we should be doing this”, and being told, “No, no, no, you just don’t get it”.

‘And I think the people in lead positions in this industry want people who work in their firms to feel confident that they can speak up, but it takes a bit of doing. You can’t just make that happen.’

Banking scandals such as Libor and forex rigging ‘massively damaged the trust of the people at present in the industry. The industry has a long way to go to make itself worthy… and that is so important because we need banks.

‘What banks do is integral to how a society such as ours functions. If people feel that the banking industry is not trustworthy, that’s a serious problem for our society.

‘I’m now straying off into giving a sermon, but I do feel rather strongly about that.

‘The after-effects of the financial crisis are still going on. But I think it acted as a tremendous catalyst for people having to rethink how they do this business, and these are complex businesses.’

Bowe was born and raised in Liverpool. She still has friends and family there and goes back regularly to visit from her north London home.

‘Outside work, I’m very fond of music and I’m very fond of watching football as well. Liverpool are my team. I’m a Liverpool supporter to the extent that my colleagues find very boring.

‘I listen to music all the time. I’m a very, very bad amateur musician myself; I play the cello really badly. One of the things I do with the other bits of my time is to chair the board for music exams.

‘I went to a marvellous primary school in Liverpool and I was fortunate enough to have a state education right through university and I think the opportunities I had were amazing, so I have a strong interest in education.’

What are Bowe’s ambitions for the BSB? ‘I’d like to see us as an established part of the business world of the UK and acknowledged as contributing real value to the strengthening of British business.’

Speaking about the changing balance of men and women in British boardrooms, the top three positions at the BSB, she points out, are held by women – herself, Cottrell and group director Alison Robb of the Nationwide Building Society. However, she adds that she was so occupied with choosing the right person for each job that this didn’t occur to her.

‘Here’s my final thought about how things have changed. When we were about to announce the board of this organisation of ours, I was talking to a very prominent person in the City and I said, “I’m going to announce our board tomorrow”.

‘He said, “Oh, good, 50–50,” and I said, “50–50 what?” and then he said, “Men and women”, and up until that point I hadn’t thought of it. I thought it was kind of interesting that he was thinking about it. This is a senior man from one of our founder banks, but I also thought I personally have moved far beyond that.’

The original version of this article appeared in the June 2015 edition of the Securities & Investment Review magazine, the membership title for the Chartered Institute for Securities & Investment.