Just reading about the events at the Italian bank Monte De Paschi De Sienna and Carlos Ghosn’s travails in Japan, there are really two striking points to draw out here, one of which relates to both the situations, and the other to the bank (and bankers) only!
Looking first at the latter situation does seem that three banks were involved; and once again most unfortunately, it is the ordinary working managers who go to jail raises that constant question what about their leaders? Surely some of the leadership in these organisations are as culpable as the individual perpetrators.
It is really surprising that none of them are even names, let alone charged! Also in passing, one might mention the £50bn hit that UK banks have taken over the past number of years for miss-selling PPI. Where is the retribution? Surely they would be demanding some kind of punitive action? It is staggering that such losses pass with barely a comment — regulators? “Hello”!
Anyway to both of these situations there is evidence of a complete failing of ‘corporate culture’, if indeed there was any at all.
An “appropriate culture” is driven by the “tone from the top” which in these cases has clearly gone awol. I have written before about the dearth of ethics and culture in banking today and now to see it in the auto industry is quite striking. It’s quite clear that Ghosn started out really well and then almost became a victim of his own longevity and PR in the role finding that eventually he could pretty much do as he pleased — echos of Fred Goodwin and other banking leaders throughout the noughties and certain banking leaders today who feel that they they’re able to get away with just about anything — mentioning no names!
Where was Ghosn’s Board of Directors? His chairman, the audit committee, the corporate governance committee and indeed the internal audit department — surely it seems to be a complete litany of failings.
Course hot off the press at the moment was the announcement by Westpak in Australia of huge money laundering breaches, which are likely to result in very substantial financial penalties. No hint of any resignations as yet!
The old Harvard Business School philosophy that CEOs should remain no longer than seven years in their roles is yet again underscored here, even seven years if the culture and ethics in the business are not constantly re-enforced and adhered to could be too long!
n Glasgow-based John R Wright is an academic, veteran banker and a former CEO of Oman International Bank and Gulf Bank, Kuwait.
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