Goodwin Knighthood Loss Should Spur New Rules, Lawmakers Say

The reasons for stripping people of U.K. knighthoods and other honors need to be clearer and the process more transparent, a cross-party panel of lawmakers said.

Fred Goodwin, former chief executive officer of Royal Bank of Scotland Group Plc (RBS), lost his knighthood partly because of the “media storm” around him even though he fell outside formerly used criteria and the previous Labour government had rejected calls to annul his award, Parliament’s Public Administration Committee said in a report published in London today.

“The fact that the criteria for forfeiture were so obscure and narrow was unfortunate,” the report said. “There should be a clear and expanded criteria for the forfeiture of an honor, one of which should be damage to the industry or sector that the individual was originally deemed to have served so exceptionally.”

Goodwin, who led RBS into the world’s biggest bank bailout, was stripped of his award in January for “bringing the honors system into disrepute,” a charge that in the past required a criminal conviction or expulsion from a professional body. He was awarded the honor, entitling him to call himself Sir Fred, in 2004 for “services to banking.”

The credibility of the honors system, under which people are presented with awards by Queen Elizabeth II for service to their community or country, will be brought into question unless grounds for losing the award are clarified, the committee concluded.

There should be an independent panel, headed by a retired judge, to assess whether honors should be removed, it said. The panel should hold its proceedings in public and allow evidence from the person whose honor is under consideration.

‘Shadowy Group’

“It appears to many that the decision to strip Fred Goodwin of his knighthood was made in response to media pressure, by a shadowy group of senior civil servants, acting in secret, with no clear rules or criteria,” Bernard Jenkin, the Conservative lawmaker who chairs the committee, said in an e- mailed statement. “The Honors Forfeiture Committee should be independent and its procedures and decisions must be much more transparent.”

There are also too many awards for public servants doing their jobs and celebrities and not enough for people who carry out voluntary work in their local communities, the committee said.

The government should create an independent honors commission to consider nominations and remove political interference from the process, it said.

“The public values the honors system, and it commands a significant degree of public confidence, but people still say that honours appear to be awarded through a mysterious process by the various committees to the usual suspects they already know,” Jenkin said. “There should be no ‘automatic’ honors for people who hold a certain post, or for celebrities and sports stars at a certain level, but too often it seems this is still the case.”

To contact the reporter on this story: Thomas Penny in London at tpenny@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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