The British Press is calling its latest sex scandal “Lloyd’s Bonk.” The nation’s largest retail bank, still partly owned by the U.K. government has been caught with its trousers down. Or, rather, the man in charge of it has been.
Lloyds Banking Group chief executive Antonio Horta-Osorio, a Portuguese who lists cage-diving with sharks as one of his pastimes, was exposed by The Sun newspaper.
It printed pictures of him with Dr. Wendy Piatt, a former adviser to former British Prime Minister Tony Blair, in Singapore in June when they were both on business trips there and claimed that the couple had a four-year affair.
The story broke on August 8. The next day, both the bank and the Russell Group of elite British universities, of which Piatt is director-general, asserted that the executives had claimed appropriate expenses for the trip.
Two weeks later when Horta-Osorio, 52, returned to work after annual leave, he issued a letter to the bank’s 75,000 staff, expressing his “deep regret” for “adverse publicity” over the Singapore trip and “damage” done to the group’s reputation.
Note the wording. Horta-Osorio, who is married with three children, did not admit any affair or apologize overtly for one.
He did not refer directly to the allegations, describing the reports as “speculation by certain newspapers.”
He noted that his personal life is “obviously a private matter” and stressed that he had paid for his personal expenses whilst away on business, only reclaiming genuine business expenses.
But the inference is clear and so is the reason for the letter. Three years ago, Horta-Osorio introduced a new Lloyds Banking Group “code of personal responsibility, which urged staff to “do the right thing” and to “lead by example.”
The code instructs staff to ask themselves: “Would I be happy to tell my colleagues, family and friends about my actions” and “Would Lloyd’s Banking Group be comfortable if my actions were reported externally?” before embarking on any course of action.
Horta-Osorio’s letter to staff states: “I have been a strong advocate of expecting the highest professional standards from everyone at the bank and that includes me.”
“I will continue to strive to meet those standards. Having the highest professional standards raises the bar against which we are judged and as I have always said, we must recognise that mistakes will be made.
“I don’t expect anyone to get everything right all the time. The important point being how we learn from those mistakes and the decisions and actions we take afterward.”
How should we view his letter? Is this a precedent for CEOs to apologize to staff for personal indiscretions?
Do employees have a right to such actions, when their leaders are exposed?
These are real questions and Lloyds will not be alone in having to deal with them.
Seven years ago, word was put out that a U.K. financial services boss was about to be exposed in a British tabloid for having an affair.
The CEO was duly named as Andrew Moss, the then chief executive of insurance group Aviva.
Moss did not apologize, issuing instead a warning through his solicitor that he wanted no more information about his private life to be exposed and warning that he was prepared to go to the courts to guard his privacy.
Aviva said there had been no breach of its rules and that Moss had been “very open” about the matter with its chairman. Moss stepped down nearly three years later after the group lost a shareholder vote on executive pay.
Before Moss was outed, however, no fewer that three CEOs of major companies are reported to have called their compliance departments to warn that the straying business boss in question could be them.
There are other questions too. How many lawyers did it take to draft the Horta-Osorio letter? Why did it take two weeks to issue? Could it not have been sent sooner? Was it not important enough for Horta-Osorio to interrupt his holiday for?
This matter may not be over. The Sun claimed in a follow-up story on August 27 that Horta-Osorio and Piatt also met on an earlier work trip to San Francisco in November 2015 to meet clients including Google, Wells Fargo and silicon valley firms.
Will he have to write another letter to staff saying he regrets that too?
Where will all this stop? Horta-Osario may have started something that he, Lloyds Banking Group and other misbehaving executives and their employers will be unable to halt.
Should the boss apologize to staff for having an affair? Do let me know what you think?
