Skin in the game

No, this is not a post about the eating habits of Luis Suárez during a football match. The phrase ‘skin in the game’ was coined by Warren Buffet ‘referring to a situation in which high-ranking insiders use their own money to buy stock in the company they are running’. It has a wider application in that it can refer to the need for people to have a stake in the work they are doing as an incentive to better performance. The classic example of this is the insistence that top financiers need massive bonus incentives in order to perform well; the better the company does, the higher their bonuses. Unfortunately, it seems in some cases that even when the companies performed disastrously the high-ranking insiders still expected the bonuses and other financial benefits on top of the salaries.

The phrase ‘skin in the game’ was referred to several times by Justin Welby, the present Archbishop of Canterbury, in his role as a member of the parliamentary commission into banking. Questioning HSBC’s top executives shortly after HSBC had been fined £1.2bn over the money laundering of drug money, Welby asked the following:

I'm increasingly baffled at the discussion we are having. What is it essentially about bankers that means they need skin in the game [bonuses]? We don't give skin in the game to civil servants, to surgeons, to teachers.

There's a whole range of people who don't have that. It seems to me that you are putting huge effort into a values-based organisation and yet at the end of the day, particularly for your most senior staff who are most important as regards setting values and culture, you seem to be saying the only way you can motivate them to any significant extent is with cash.

The Archbishop continues in his role as a member of the commission and in a BBC radio interview to be broadcast later today sets out his reasons for continuing to address the issues afflicting the City of London. He clearly and succinctly explains his mission as Archbishop before linking it to his concerns about ethics in the City:

My key mission is to lead the Church in worshipping Jesus Christ and encouraging people to believe in him and follow him. That's my mission.

The Christian gospel has always had strong social implications and one of them is around the common good and it's one of the key areas in which the Church of England focuses.

So issues of how the City of London, which is so important and so full of very gifted people, how that behaves in relation to the common good is very key, not to the whole thing that I'm about or the Church is about, but to how we express the implications of that in day to day life.

Not surprisingly the Archbishop’s engagement with the finance sector has drawn much attention and comment, some critical and some more positive. The BBC’s Robert Peston concluded a piece on Welby stating:

But why should anyone care what this man of the cloth says about the men - and occasionally women - who provide vital credit to businesses and households?
Well he was a relatively senior businessman in his earlier incarnation (that said, he self-deprecatingly and amusingly pointed out that he was the only innumerate treasurer of one of the UK's biggest companies, and his employer, Enterprise Oil, paid someone to check all his numbers).

Also, he is a member of the influential parliamentary commission on banking standards, although his remarks to the Christians in Parliament All Party Parliamentary Group were personal, rather than representing those of the commission (I should perhaps point out that I was the token non-observant Jew on the panel that then responded to the Archbishop's reflections).

But perhaps more germanely, the UK's economic malaise shows no signs of being fixed any time soon by the supposed experts in the Bank of England or Treasury, so there may be a case for looking elsewhere for wisdom - and it is no longer eccentric to argue that what went wrong in the financial system was as much ethical as technical.

What Justin Welby is doing is demonstrating that as Christians we have ‘skin in the game’, we always have. We are called to live out our faith as followers of Christ in the world we inhabit; we are as invested in it as anyone else. We are not immune to the trials and difficulties of life and we are as affected by the financial crisis as our neighbour. If our faith had nothing to say about the ethics of the City then it is not much good to us or to our society. Of course the present situation and the particular gifts of the Archbishop in the financial sector makes this more apparent, but it should be as true for every other aspect of our common life.

One final thought. We have just celebrated Easter and been reminded afresh that we are called to follow one who had ‘skin in the game’ literally. Jesus gave himself completely for the benefit of humanity and his skin was scourged, nailed and pierced for the sins of the world; including the structural sin of economic injustice and oppression. As followers of Christ we are called to have ‘skin in the game’, to be so committed to the values and priorities of the Kingdom of God that we are willing to invest our very lives for him.