The newspaper says it has evidence to prove that the regulator vetoed calls for a board re-election in April 2008 to keep stability at the ailing bank.
“When we tried to hold individual directors to account last April, the FSA intervened to prevent it,” a major shareholder told the Times.
RBS board members are re-elected every three years, so Goodwin was not up for re-election until 2010. But the paper says investors urged chairman Sir Tom McKillop to change the rules and re-elect the board annually after RBS entered into a £12bn rights issue.
In his speech earlier this week at the National Association of Pension Funds Investment Conference, FSA director Hector Sants said: “It remains fundamental that we recognise that firms’ senior management carry primary responsibility for their actions and their resulting consequences. This responsibility is also shared with non-executives, shareholders and auditors.”