Outlook: Imro called to account

THE PRINCIPLE of senior management accountability is hard to argue with. But when the body to which you are accountable is Imro, it becomes a very harsh principle to apply. No one is arguing that those responsible for managing the affairs of Peter Young, the disgraced MGAM fund manager, should have escaped scot-free. It was right and proper for Imro, the watchdog responsible for investigating the affair, to insist that the buck stop at the top.

That said, the series of events leading up to the disciplining last week of four former MGAM directors leaves an unpleasant taste in the mouth.

The four, after a prolonged Imro investigation, were banned from the industry for periods ranging from 16 months to three years. They were also ordered to pay Imro's costs - running at more than pounds 200,000 each. But prohibitively high legal costs effectively denied the four access to an independent tribunal. Those on the wrong end of the Barings affair discovered exactly the same problem.

Their suspensions from the industry are back-dated to December last year - the date when Imro's enforcement commitee first met to discuss their penalties - although the four have effectively been prohibited from working since they were dismissed from MGAM in October 1996. It also seems strange that Imro had reached a settlement with the firm itself before it had even got round to interviewing three of the four directors disciplined last week. Perhaps the most disturbing element of this whole saga is the lack of recourse the four appear to have had to a decent appeals process. An individual who is found to have breached Imro rules has two options. One, settle with Imro via a plea bargaining process. Or two, take the case to independent tribunal, typically a hideously expensive process beyond the pockets of most of us, even highly-paid City types. Not surprisingly, most people - including the four disciplined last week - decide to take the former route rather than risking a tribunal.

At least three of those disciplined last week now look likely to write to Imro's chairman, Douglas McDougall, and demand an independent inquiry. So Imro's McDougall now has two choices. One, try and brush this matter under the carpet, an approach which seems to have done Imro little good so far. Or two, take some of his own medicine, assume responsibilty for the actions of his staff and take a long hard look at Imro's own chain of managerial reposnibility. As the MGAM four will gadly tell him, the buck must stop somewhere.