Shareholders must acknowledge own role in Bank of Ireland fiasco
Published 12/07/2011 | 05:00
WHO says bankers can't learn from their mistakes?
Last month, Bank of Ireland chief executive Richie Boucher and chairman Pat Molloy were pelted with eggs. Yesterday at the bank's latest shareholder meeting to approve a rights issue, they took a leaf out of Saddam Hussein's book by using three rows of bank staff, directors and analysts as human shields against any further avian scuds.
It was a rare example of foresight from the hapless duo that must have left many shareholders wishing the bank's management paid as much attention to the bank as to their dry cleaning bills.
In the event, it was another case of closing the door after the horse had bolted. The anger seen last month at the annual shareholder meeting seemed to have morphed into resignation by the time yesterday's so-called emergency meeting was held to nod through a rights issue which will almost certainly force the taxpayer to become the bank's majority owner.
Instead of eggs, we saw a lot of technical questions about the rights issue, although shareholders who spoke showed very little inclination to buy the shares at 10c each -- a year after many of them took up an offer to buy shares at 55c each.
"I was duped last year," one of them said. "I can assure you I might be jaundiced in one eye but I am not jaundiced in both."
Many others expressed concern about yet another rights issue at some future date.
While there were many interventions along these lines, none of them seemed too concerned about the role of the taxpayer who is reluctantly underwriting the entire rights issue.
This insouciance is now a common feature of bank shareholder meetings. Almost every indignity has been heaped on the banks' hapless managements -- charges of treason, heartbreaking tales about elderly people who can no longer afford to stay in nursing homes, and stories about repossessions.
Almost every aspect of the financial meltdown has been touched bar one. The missing story is the personal responsibility shareholders bear for what has happened.
While the anger about plummeting share pricesis understandable, the heart hardens after aggrieved shareholders repeatedly complain about the money they have lost.
At yesterday's meeting there was almost no acknowledgement that it was their mistakes that now forces the State to pump billions more into Bank of Ireland to keep it afloat.
No shareholder acknowledged that truth that ownership confers responsibility as well as rights. Shareholders will argue (correctly) that they have very little power. This is true but they understood the limitations of shareholder democracy when they bought shares.
Despite these limitations, they decided to make themselves joint owners of the bank. Shareholders have been eager to extract apologies from management, but perhaps it is now time for the odd apology from the owners as well as the hired help?