With the financial and real world in turmoil it's hard to find many amusing things in the news. However I enjoyed reading about the World's Worst Banker award of Daniel Gross in the Newsweek and Slate. "Fred the Shred" as Sir Fred Goodwin, ex CEO of the Royal Bank of Scotland (or what is left from it) got the price. The justification of the award is perfect and could apply to many of the contemporary top managers who have made the Shareholder Value (see my post from last) their management mantra. Some of the shareholder value-increasing activities attributed to Goodwin are:
1. "Carrying off mergers and acquisitions and calling them growth" since growth is the basis of stock price growth (and the value of management stock options of course)
2. "Ill-advised, history-making, massive merger precisely at the top" with exactly the same effects as 1. Victims of this "strategy" the Fortis group and of course the ABNAMRO (and the Dutch taxpayer) . The rest of the story in the article!
Congratulations to the many candidates for the award this year! As a teacher I am thankful to them. They care that the supply of fine examples of Corporate Governance for our Business students will continue for another year.
I sincerely hope that some of our vocal colleagues who signed the September petition to the Congress will take the initiative to circulate a new such petition arguing that it is time that something must change with the modern management (or us who teach it). A recent article of Rakesh Khurana and Nitin Nohria in the October 2008 edition of the HBR titled "It's Time to Make Management a True Profession" offers a good basis for the petition.
