FORMER Royal Bank of Scotland chief executive Stephen Hester was left "unhappy" after political pressure forced him to decline his bonus, its chairman Sir Philip Hampton said, as he revealed bank staff are going through a "sheep dip process" of standards training.
Sir Philip told the Confederation of British Industry's annual conference in London that there is no problem with public trust in business, clashing with Justin King, chief executive of his former company J Sainsbury, who spoke of a "crisis" in opinion towards the corporate sector.
Meanwhile, Sam Laidlaw, chief executive of Scottish Gas owner Centrica, admitted trust in the energy industry is at an all-time low as he revealed he would not accept a bonus for this year.
Mr Hester declined two successive annual bonuses before he stepped down at the end of September after coming under political pressure in early 2012 and later that year being hit by systems problems at RBS. He said later that he had considered resigning.
Sir Philip said: "It certainly made Stephen unhappy and I think having unhappy chief executives is not good for business."
He added: "People who are motivated by pay regard it as a measurement of their achievement and success and get demotivated when external forces get in their way."
Mr Hester's replacement Ross McEwan has said he will not accept a bonus for 2013 or 2014.
"My basic assertion is that there is not a universal or deep problem of trust in business," Sir Philip said.
He added: "It was much worse in my experience in the '70s."
The former Lloyds TSB finance director admitted "the banking industry has been in a class of its own". After recent scandals such as payment protection insurance mis-selling and attempts to rig key interest rates, he said: "It is foolish to think all the bad behaviour has been stopped."
But he said that most issues are "legacy in nature" and that "all staff are going through a sheep dip process" to improve ethical standards and conduct at RBS.
This stance put Sir Philip at odds with Mr King, chief executive of supermarket chain Sainsbury, whose board he used to chair. Mr King said: "I think there is a crisis of trust."
He added: "The time to move on is when our customers, and in the case of politicians, voters, tell us that trust is restored."
He also called on companies to be more transparent about their tax affairs.
"If you are doing nothing wrong, you should have no problem laying it bare to public scrutiny," he said.
Speaking after a series of price rises saw his sector embroiled in a political storm, Mr Laidlaw said: "Trust in the energy sector as a whole is at an all-time low. We understand that.
"The starting point is about transparency," he said.
But he added: "Transparency is not enough when people cannot afford to pay their energy bills."
Mr Laidlaw said households had been hit by "stalled incomes". He said any cut in green levies would be immediately passed on to consumers.
"We are at this very difficult inflexion point where we have the North Sea (oil and gas) running out. We have a lot of power stations that need to be replaced," he said."We have pretty ambitious targets in climate change and a number of our customers are struggling to manage their bills."
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