soft skills Polly Peck, Maxwell, Barings
The 20th century <Polly Peck, Maxwell, Barings >In 1932, two economists Bearle and Means made some observations about American companies:
● Shareholders were more likely to sell their shares than speak out if they thought directors were not running the company very well. This could result in poor quality management never losing their jobs.
● Some American companies were getting very
By the 1950s, companies were growing ever larger – what we now know as "
The 1970s – 1990s saw problems starting to become common.
By the late 1980s, there were some famous corporate collapses – some due to poor management, but many due to fraud: large, and with so many shareholders there was a growing gap between those who owned the companies, and those who controlled them. globalization" … the existence of large multinational companies with influence around the world was well under way. Polly Peck ● Rapid growth in the 1980s took this East End company to the FTSE 100.
● Run by Asil Nadir (now in Northern Cyprus, and unlikely to visit the UK!).
● Donated money to the Conservative Party (who were in power).
● In 1990, £700m found to be missing.
● Company placed into administration. Maxwell ● Publishing and Newspaper empire (Daily Mirror).
● Seemed very successful.
● Run by Robert Maxwell.
● Donated money to Labour Party.
● In 1990 / 1991 company debts grew, and Maxwell used Pension Fund money to keep the companies from going bust. Barings ● In early 1990s, traditional UK bank Barings expanded into "new" products – options and futures trading.
● Nick Leeson was given the new Singapore branch to manage.
● He had total control – he was the star trader, but also controlled the recording of these trades … no
● When mistakes were made, he was able to hide them in a suspense account – his 88888 account.
● Then he started making illegal trades, partly to hide his own mistakes, and then in an attempt to make massive profits – the 88888 account became his hiding place for everything.
● Eventually he opened positions that left Barings heavily exposed if the Nikkei fell … and the Kobe Earthquake caused it to crash.
● With losses growing daily on positions he could not close … he ran away.
● Only then did Barings find out how bad the situation was, and it was too late to save the Bank … which was later to sold for £1. segregation of duties!
The 20th century <Polly Peck, Maxwell, Barings >In 1932, two economists Bearle and Means made some observations about American companies:
● Shareholders were more likely to sell their shares than speak out if they thought directors were not running the company very well. This could result in poor quality management never losing their jobs.
● Some American companies were getting very
By the 1950s, companies were growing ever larger – what we now know as "
The 1970s – 1990s saw problems starting to become common.
By the late 1980s, there were some famous corporate collapses – some due to poor management, but many due to fraud: large, and with so many shareholders there was a growing gap between those who owned the companies, and those who controlled them. globalization" … the existence of large multinational companies with influence around the world was well under way. Polly Peck ● Rapid growth in the 1980s took this East End company to the FTSE 100.
● Run by Asil Nadir (now in Northern Cyprus, and unlikely to visit the UK!).
● Donated money to the Conservative Party (who were in power).
● In 1990, £700m found to be missing.
● Company placed into administration. Maxwell ● Publishing and Newspaper empire (Daily Mirror).
● Seemed very successful.
● Run by Robert Maxwell.
● Donated money to Labour Party.
● In 1990 / 1991 company debts grew, and Maxwell used Pension Fund money to keep the companies from going bust. Barings ● In early 1990s, traditional UK bank Barings expanded into "new" products – options and futures trading.
● Nick Leeson was given the new Singapore branch to manage.
● He had total control – he was the star trader, but also controlled the recording of these trades … no
● When mistakes were made, he was able to hide them in a suspense account – his 88888 account.
● Then he started making illegal trades, partly to hide his own mistakes, and then in an attempt to make massive profits – the 88888 account became his hiding place for everything.
● Eventually he opened positions that left Barings heavily exposed if the Nikkei fell … and the Kobe Earthquake caused it to crash.
● With losses growing daily on positions he could not close … he ran away.
● Only then did Barings find out how bad the situation was, and it was too late to save the Bank … which was later to sold for £1. segregation of duties!
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