Tag Archives: HR

Banks, Risk, Culture: What Role Does The Culture of Society Play In Banks’ Behaviour?

The role of the wider society in shaping the culture and risk profile of banks and other organisations might be more important than most people think. Understanding that role is extremely important for bank executives and risk professionals if they are to build organisations that are sustainable, economically and competitively, in the long term. Continue reading

The Role of HR: To Out The Megalomaniacs?

Book Review: Clearing the Bull, The Financial Crisis and Why Banks Need a Human Transformation

Book review – A very interesting review and response from an HR professional to the HR issues raised in Clearing The Bull.

Human Risk 4: Steve Ballmer, The Decline Of Microsoft

This is the fourth in a series of articles on Human Risk. The first three can be found here, here and here.

Microsoft CEO Steve Ballmer, who took over from Bill Gates in 2000, recently announced that he will be resigning within 12 months. The fact that Microsoft’s shares jumped almost 8% on the news is testament to the widely held belief that Ballmer is primarily responsible for the decline of Microsoft relative to its much nimbler rivals such as Google and Apple.

By some estimates as much as $24 billion was added to the market value of Microsoft on Ballmer’s announcement. This is proof, if ever any was needed, that culture and risk are twin sides of the same coin. The only question is; what if any, were the specific cultural issues that caused one of the most important organisations in modern history to decline in value and competitiveness? Continue reading

Human Risk 3: Why Banks, Organisations Must Rethink Their Approach

This is the third in a series of articles on Human Risk. The first two can be found here and here.

It is commonly acknowledged that a primary cause of the last financial crisis was the poor culture and values within the banking industry—superstar bosses with big egos, greed and the failure to challenge management have all been identified as having played a major role. This assertion has been supported with reference to the likes of Fred Goodwin of RBS, Dick Fuld of Lehman Brothers and Stan O’Neal of Merrill Lynch who have all been named in Time magazine’s list of 25 People to Blame for the Financial Crisis.

If personal skills and attributes were indeed a major cause of the financial crisis then we must conclude that the failure of HR was as much to blame as the failure of traditional risk management. Continue reading

Human Risk 2: A Much Bigger Risk Than Most People Think

Human Risk 2:  A Much Bigger Issue Than Most People Think

This is the second in a series of articles on Human Risk. The first can be found here.

It has been one week since the first article on human risk and the feedback has been more than interesting. Some believe that the management of human risk begins and ends with recruitment, retention and promotion, the traditional HR view of human risk. Others acknowledge that human risk goes beyond HR considerations but also believe that managing process risk is way more important than managing human risk.

This article will emphatically illustrate why both these assertions are wrong. Continue reading

Human Risk: The Bond Salesman That Wasn’t

No sooner had I launched a series of articles on Human Risk, the first of which can be accessed here, than I find this amazing story: Continue reading

What Is Your Organisation Doing About Human Risks?

This is the first is a series of articles on human risk.

What is human risk? Do you believe that the management of human risk is important? How important is human risk to your particular organisation? Do you believe that your organisation is doing enough to manage human risk? Is the management of human risk the responsibility of HR or is it more important than that? Continue reading

Where was HR in the Financial Crisis?

The folowing article was posted on the People Management blog on March 13, 2012.

Conventional wisdom has it that the subprime crisis was all about the failure of regulations, governance and controls. Presumably, in order to safeguard against the next crisis, the prescription has to be more regulation, more governance and more controls.

The problem is this is exactly what was prescribed after every previous financial storm, such as the LDC (less-developed-country) debt and junk bonds crisis, and the dotcom bubble. This inability to recognise the true causes and remedies of financial crises means they have become like a recurring decimal, seemingly without end.

If we look beyond the confines of convention we will see that the subprime crisis was about human failure arising from poor values. We can specifically relate this to HR by looking at the CEOs involved. They have been accused of megalomania, of having aggressive, oversized egos, and of creating unwieldy, poorly integrated, high risk-taking organisations. The question, therefore, is this: if leadership was a main source of failure, where then was HR?

Every year, HR departments spend millions evaluating employees, performing staff surveys and ensuring that organisations recruit and retain people with the right values. Why were such standards not applied at the very highest, and thus incredibly important, level? Is there any truth to the dictum that HR does not speak truth to power?

For a long time HR has complained, and rightly so, that it did not have appropriate access to executive management. That has now changed in most organisations. Now that HR has that access, it needs to determine how to make best use of it and very clearly articulate its concerns about executive management directly to executive management.

However, that on its own would not be enough. In banking in particular, HR must place itself in a position to assess the impact of executive behaviour on the economic and competitive sustainability of the organisation – as well as what precisely needs to be done when such behaviour is found sadly wanting.

Leadership was not the sole human factor in the subprime crisis – but it’s a great place for HR to start.

Jonathan Ledwidge is conducting a survey on current attitudes to banks, including questions about their values, and invites readers to participate via bit.ly/PMledwidge