Abstract
The period between 2007 and 2009 witnessed an extraordinary decline in the fortunes of many major banks. Several received refuge in the form of governmental financial intervention. Others were taken over by rivals, whilst some entered bankruptcy. The onset and scale of the financial crisis appeared to have been largely unforeseen, and reasoning as to its occurrence has been a feature of its aftermath. The sector’s commercial activities, including the role of innovative financial products to disperse risk, have received increased external attention, with a lexicon including credit default swaps, mortgage-backed securities and collateralised debt obligations often being revealed in the media. However, a term whose consequences are described in Greek mythology has also found frequent application within publications that linked the hubris of certain CEOs to the dire consequences that befell their organisations. Two high-profile cases include Lehman Brothers and the Royal Bank of Scotland (RBS). The bankruptcy of Lehman Brothers, which was founded in 1850 and had established a global business and reputation, became the largest in US history. In its wake, Richard S. Fuld, Jr, the final CEO and Chairman of the company, generated media commentary which ascribed his personal hubris as having contributed significantly to the ‘meltdown’ of the company (Plumb and Wilchins, 2008). Similarly, articles regarding Fred Goodwin, the CEO of RBS during the period in which it accumulated the largest losses in UK corporate history, suggested that his hubris contributed not only to the enfeeblement of his organisation but also in ‘bringing banking to the brink’ (Brummer, 2009) and for his becoming the ‘world’s worst banker’ (Hosking, 2009).
Published Version
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call