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More accountability
PM Editorial
16 Oct 2008
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The FBI investigation at Fannie Mae, Freddie Mac, AIG and Lehman Brothers could be followed by examination of the behaviour of regulators, bankers, accountants and other professionals on both sides of the Atlantic (“Hot topic”, Letters, 2 October).
As well as legal actions and negligence claims, professional bodies may question those who have been involved in developing, authorising, packaging and distributing the toxic products that have caused so much harm.
The credit crunch has exposed the inadequacy of many directors. The scale of public intervention required to prevent meltdown reflects a failure of boards to question and read the road ahead. Chief executive officers and their senior executive teams have not been challenged or held to account. Certain implications and future scenarios should have been foreseen. Directors stood by while huge bonuses and commissions were paid for bringing what would prove to be time bombs into their organisations.
Experience of following the herd and looking the other way need no longer be a requirement for further board appointments. Directors who serve as a loyal supporter of the CEO have been in demand, when the emphasis should have been on curiosity and courage – the curiosity to question and the courage to challenge. A new generation of directors is required, selected from people with integrity who have their feet on the ground and think for themselves.
Colin Coulson-Thomas, Professor of Direction and Leadership, University of Lincoln
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