However the ethical standard was not only thrown out the window the sense of propriety of the people involved was put into questions.The board of directors itself populated by either the same people who will receive the bonuses shall of course choose to receive the bonus. It should be noted that there is nothing wrong in getting bonuses however, getting it from a distressed bank or an institution that are not only losing money but will be bailed out by the government.Bonuses are incentives given to employees for their good performance. Bonuses should therefore only accrue if the entire organization performed well. In the case of the Royal Bank of Scotland the opposite happened the senior executives were rewarded for their bad performance (Treanor, 2010). In the case of the bonuses awarded to the senior executives of the Royal Bank of Scotland the bonuses were part of their contract. Thus, the bank was precluded into awarding it because if its contractual obligation.The action of the Royal Bank of Scotland affected all the stakeholders of the bank. The resulting losses in the value of its shares resulted in losses for all the investors including the United Kingdom government itself. It should be noted that the United Kingdom owns more than half of the Royal Bank of Scotland.The impact of the bonuses resulted to losses that resulted in turn to a bail-out which could have been used by the United Kingdom government to bail out institutions that are truly in distress. The Importance of Royal Bank of Scotland.
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