Of Quisling money men(or the case of the dominant chief executive and the bean-counting underling.)
Much has been written recently about the chief executives of certain banks driving their boards, by dint of personality and the apparent ability to walk on water, to approve acquisitions in a headlong rush for size and global reach. To drive investment managers, charged up with the lure of huge bonuses, to riskier and riskier deals.
The question arises, "What was the financial director doing?"
The money man advises the board on the financial probity of proposed actions. He holds the boss in check by putting the financial case alongside the commercial one. He is his own man, independent of mind and financially secure. He guards the rest of the board against false optimism and adds sensitivity analysis to a proposal. He is the cautious and boring sod who loves the lady prudence. Furthermore, he has accounting rules on his side: rules that say you must mark down credit-worthy assets to fire-sale prices: rules that force lenders to set aside reserves.
At what point do the money men say sorry? we stood aside and let you down.
jgs-2009
