The bank said it took decisive action following complaints about inappropriate behaviour within a team of employees in 2015.
The managing director at Coutts for more than eight years, Harry Keogh, has been at the centre of many complaints about physical and verbal harassment of women by male colleagues at the bank, with an investigation held in 2015, according to a report at the Wall Street Journal yesterday. Keogh has been reportedly punished and remains at the firm.
Coutts has told WealthBriefing it acted decisively to deal with behaviour of some staff and has urged employees to speak out if such misconduct occurs.
Describing the situation leading up to the bank's investigation three years ago, the WSJ said matters reached a point where some women refused to work with Keogh. In 2015 the bank assigned senior figure Gayle Schumacher to carry out an internal investigation into Keogh’s team of bankers, the newspaper said, citing Coutts documents it said it had seen. Schumacher interviewed 20 Coutts bankers and was told about allegations of inappropriate behaviour by Keogh and other bankers, “including lewd comments, heavy drinking and unwanted physical contact”, the report continued. (Schumacher retired from the bank at the end of 2015.) The information was relayed to Michael Morley, who at the time was chief executive of Coutts in the UK. (He now is head of the UK wealth operation at Deutsche Bank). The WSJ quoted unnamed sources saying that Morley told colleagues and Coutts’ parent bank, Royal Bank of Scotland, that Keogh should leave. There were discussions involving Alison Rose, the RBS head of commercial and private banking, Morley and others, and a decision was made in mid-2015 that Keogh could stay, the WSJ said.
The newspaper said Keogh was disciplined by the bank, such as withholding a bonus, issuing a written warning and assigning a coach. One source quoted by the WSJ said Keogh denied allegations of inappropriate behaviour and accepted disciplinary action without admitting those allegations, another source said.
Coutts told WealthBriefing in an email: “We are committed to this being a bank where everyone feels safe at work. Which is why, when allegations of inappropriate behaviour were made in relation to a particular team within the bank in 2015, an investigation was conducted into those concerns. The investigation found that within that team, standards had fallen below what we regarded as acceptable. Decisive disciplinary action was taken as a result. We are committed to ensuring a continued focus on our conduct and culture, and we encourage all employees to speak up where they experience or encounter any behaviour that falls below our standards.”
Keogh declined to comment on the matter, the WSJ report said.
The WSJ report did not specify if other bankers at Coutts had been punished for any related matters.
Keogh has been MD at Coutts since January 2010; prior to this, he was MD, private banking, RBS, from January 1999. In 1999, according to his Linkedin profile, he “founded RBS Private Banking incorporating Drummonds and Child & Co following the take-over of NatWest”. He was a MD at RBS from 1995 to 1999, his profile says.
The report comes at a time when, as reported in this publication and elsewhere, issues of how female staff are treated in financial firms is an increasingly sensitive issue, given concerns about gaps in pay and promotion opportunities. A number of industries, as well as the field of politics, have been rocked by stories of alleged misconduct. There are also political issues in play with Coutts and RBS: Coutts, as a venerable bank and known for having the British monarch as its client, has a reputation to guard, while its parent firm is still part-owned by the UK taxpayer since it was bailed out in 2008.
In February 2016 Coutts announced that it had a new chief executive, Peter Flavel, joining from JP Morgan's private bank in Asia.