The global collapse of financial systems has been a long
time coming. Since its unwelcomed, though foreseeable, onset, there has been
much finger pointing – individuals, CEOs, CFOs, companies, unions – those
responsible for putting the rest of us in such a mess! In reality, it is
impossible to isolate any single cause.
In 1995, trader Nick Leeson was working for Barings Bank where, for years, he
had been hiding losses in the tens of millions of dollars, while reporting
fictitious profits. Many within the company benefited financially from these
reported ‘profits’. When everything came crashing down, Leeson had lost more
than a billion dollars and a jail cell became his new home. While incarcerated,
he penned his autobiography Rogue Trader.
Upon reflection, however, there was nothing rogue about Leeson or his
activities. They were generated, encouraged and supported by the system in which
Leeson placed himself. Business professor Ian Greener writes that “whenever
significant fraud occurs, the central protagonist is always portrayed…as acting
alone and subverting the system. But …for significant fraud to occur, the
fraudster must be trusted and even protected by those around him or her.” As
Leeson admits, his actions were such that Barings management “had to know
something was wrong.”
Leeson was not unusual in the financial industry. He was not a rogue. He simply
operated in an environment in which “incentives are all geared toward the
maximization of profit.” Each of us, in our actions – business or personal –
supports one system or another, one way of thinking or another, one way of life
or another. The question is: Do we consciously support systems in line with our
values or beliefs or do we allow ourselves to go with the current, unaware of
the impacts of our actions? Each action we undertake is a choice and each choice
generates consequences. We ought, then, to strive toward consequences achieved
consciously and in harmony with our values.
