Job interviews usually have a trick question from left field but if you want a senior position in finance, expect to be asked “What are the circumstances under which the firm will fail?”.
This might not sound like positive thinking but it is the question the Financial Services Authority will ask. Having failed to prevent the credit crisis, the regulator is getting tough with the people who caused it, so besides being interviewed by headhunters and nominations committees, candidates for financial posts will now have a grilling by the FSA too.
A letter to all 5,000 firms warns candidates what to expect when they are summonsed for their hour-and-a-half inquisition at Canary Wharf. That question about the firm failing is the starting point of the interview: after that, anything goes. The only other hints specified are that they should not bring a friend to help them through the interview and should have read the Walker Report on what is required of senior executives and directors. The basis gist of the letter, however, is don’t waste the regulator’s time with unsuitable candidates.
The FSA is getting tough. Rather than simply apply a “fit and proper” test it now admits to operating a “credible deterrence policy” in which it will monitor performance and competence as well as integrity and honesty. And it wants not only to interview proposed appointments but to vet shortlists for chairman, chief executive or senior independent director positions.
That means directors in any business will face this examination if they want to become non-executives at an FSA-regulated company. We have already seen some senior business people discreetly leave the boards of big banks rather than have their credentials questioned. But with so many companies operating in regulated fields — from the media to utilities — it is feasible that this intense vetting process will be applied to an increasingly wider range of positions.
And as the exams get tougher, expect to see cramming schools open. No business will let its proposed recruit turn up for an FSA interview unprepared. They may be barred from taking a representative with them to the regulator’s office, but firms will subject their candidates to a concentrated crash course on the company and their responsibilities before they attend the grilling. There will be mock interviews for everyone from traders to future chairmen and before long the style of interview and the questions asked will be well known and the responses well rehearsed.
Recruits will be so well-practised in reciting the circumstances in which they expect the firm to fail that they should pass with flying colours. But the danger is that boardrooms become filled with those who are good at passing exams rather than those who are good at running a business.
(Pic: Mike Knell cc2.0)
