Back from a holiday on the south coast enjoying the tiny bit of sun we had this summer. I had a lot to read especially with everything developing with Lehman Brothers and the subsequent collapse.
For me the main reason for its demise was the shocking management team headed up by Richard Fuld. He comes across as a hugely egotistical chap with little or no concern for others and even after this debacle it looks like he will still be able to walk away with a fat pay slip. Others in the company will not be so lucky, especially as I understand, they were pretty much ordered to buy back shares at bonus time all of which is now worthless.
And I think this cowboy showmanship is rife within big business not just in America but also in the UK and it has to stop. For years the CEO of Lloyds, Eric Daniels was seen as a man not moving with the times because he still believed that banks should not take risk and protect their investments. Only now he has been vindicated in the recent purchase of HBOS which must be one of the most sound investments for a long time.
Businesses such as WorldCom and Enron also show that this isn’t just a finance industry problem but an issue throughout corporate America. The problem? Short termism – something politicians have been doing for ages but now seems to affect businesses too. Gone are the days of long term planning and investment. From what I can make out it looks like a lot has to change before this company destroying mentality is eradicated.