A journalist in fear at prospect of answering questions

Even non-executive company directors have to prove they know all about acronyms, writes LUCY KELLAWAY

WHEN THE message landed, I was in the sandwich bar next to the office queuing to get a coffee and a pain au chocolat, and idly fiddling with my BlackBerry. It was sent by a member of the compliance team at the company where I am a non-executive director, and began innocently enough: “Hello Lucy.” As I read on, I came across a sentence that not only spoiled my day but has also had a seriously dampening effect on the four weeks since. The Financial Services Authority (FSA), it said, had asked to interview me on such and such a date for 90 minutes.

I had, of course, read about this sort of thing. After Northern Rock and Royal Bank of Scotland, the FSA has got nastier; when it conducts its regulatory “Arrow” visits, it now often insists on seeing non-execs as well as execs, to make sure they are up to the job.

In case you don’t understand why this perfectly reasonable request was so upsetting, let me spell it out. It directly fed my fear of being found out. I’ve had this fear all my working life; it hasn’t gone away as I’ve got older, though it has been slightly dulled by the experience of not getting found out, month in, month out. I was almost allowing myself to think that I’d get away with it forever.

But now, I fear that the rumbling of all rumblings is coming my way. Journalists are quite unused to being called to account, and this is the viva from hell. In front of the FSA it will be proved, surely, that I'm not a suitable person to be on the board of a big financial institution. And then the embarrassment is going to be crippling, to me, to the luckless company, and to the Financial Times.

In the weeks since the message landed I’ve been through the five stages in the Kübler-Ross cycle of grief. After I’d recovered from the initial shock, denial set in. It’s weeks away, I thought. And, I reasoned, the Tories would surely win the election, the FSA would be hastily disbanded, and none of it would arise.

Denial didn’t last long and gave way to the second stage: anger. Dratted FSA, I fumed. What a hopeless way of regulating – making us spend additional time in meetings, second-guessing what the regulator is likely to ask us, rather than focusing on the business itself. Even the name of the visit is all wrong. Arrow stands for Advanced, Risk-Responsive Operating frameWork, and so should be Arrof. If they can’t even get their acronyms right, why should one trust them to ask the right questions? Why doesn’t the FSA just Arrof?

This line of thinking was neither mature nor particularly helpful, and was quickly superseded by the third stage: bargaining. I phoned every director I know to ask whether they had any experience of this sort of thing. Oh don’t worry, some said airily. The FSA people aren’t towering intellects, they said, they just want to tick a few boxes. You just need to show that you take your job seriously and all will be fine.

Others responded differently. Oh my God, you are in trouble, they said, and started telling horror stories of people who had been rejected or branded as unsuitable.

Giddy with anxiety, I looked up sample questions on the FSA website. Some were reassuringly sensible things about risk and conduct of board meetings. But then I found: “Are there adequate procedures to ensure compliance with Threshold Conditions for Authorisation or Recognition Requirements on a continuing basis?” Strewth.

There was nothing else for it but to apply myself to four ginormous briefing documents, meticulously prepared by the company’s compliance team. And this was when the fourth stage – depression – kicked in. There are about 300 pages of stuff that I must read, and it is not a barrel of laughs. Quite a lot of it I know already, but equally there is quite a bit that I don’t.

And now, with still a couple of weeks to go before the interview, I think I’m edging towards the last stage: acceptance. I still despise the acronym.

I’m still doubtful that mastering all this detail about TCF, ICG and ICR is going to make me a better non-exec.

But reluctantly, I see that there is a purpose to my suffering. We need to be frightened, because what we do is frightening. The point of this process is to prevent a much more upsetting e-mail arriving saying that the company is insolvent and I’m on my way to jail.

So wish me luck with my homework and with my viva. I promise to let you know how I get on. – (Copyright The Financial Times Limited 2010)