But are senior bank bosses really worth the millions we read about?
First of all there is one thing you need to understand about banks in general. They are not growth companies, they are not start ups. As much as they like to splash around the word “entrepreneurial” they are anything but.
The primary business objective of a bank is not growth. A business that is trying to grow has to innovate and take risks. Banks don’t like risks, banks avoid risks.
Banks are also protected by legislation. You can start a florists with relative ease, but try starting a bank, it’s not an easy thing (just ask Dave).
Because of their risk averse nature you simply can’t have people running banks who are innovative risk takers. So what type of person rises to the top in a risk averse, status quo seeking, protected behemoth? Bureaucrats do, that’s who.
Nothing wrong with bureaucrats, every organization needs them, but as a job it is not the most mentally challenging or creative thing to do. A bureaucrat creates nothing. They are given a ready built package and their job is to administer it and make sure things keep chugging along Choo-Choo exactly as before.
This is where there is an all too common misconception. Senior bank bosses (and in general senior managers in any industry) often see themselves as leaders, when in fact they are administrators. There’s even a whole industry of management consultants and book publishers who make a business from supporting this myth.
After all, who wants to see themselves as a bureaucrat? Much nicer to be a James Cook of the finance world, heroically leading explorations in the global world of commerce.
When viewed from this perspective it does beg the question: Should administrators be paid so grandly?
What bureaucrat is really worth millions?