Lunch with a hierarchy?07-08-2015
Jerome Kerviel, the Société Générale trader who destroyed about €4.9billion in a trading loss blamed it all on the ‘hierarchy’. He could not do much about his mistakes; it was all because of his superiors that he took the wrong decisions, he argued in court. On Monday 3 August a jury found City trader Tom Hayes guilty for manipulating the Libor rates. Tom claims it was “commonplace”. He told a fellow trader: “Just give the cash desk a Mars bar and they’ll set it (the Libor rate, GW) to wherever you want.”
Summer is an excellent time to do some reading and reflecting. The book: ‘This cannot be true’ by Dutch news correspondent Joris Luyendijk, fleshes out 200 pages of outrageous behaviour by corporate and investment bankers. The book is widely acclaimed in the Netherlands and I agree it makes a good read, especially because it explains a system that is fraudulent, rather than writing the book for individual banker bashing. There are enough superficial opinions about bankers out there.
The interesting question the jury had to answer is: what is the individual’s responsibility within the system? Can we fall back on a culture of commonplace or the hierarchy that pushed me to take the wrong decisions? My colleague Kate Ng had an enlightening perspective on this through the rhetorical question: have you ever been to lunch with a hierarchy? Or any other wicked abstract such as a culture, or “commonplace”?
“Erst kommt dass Fressen, dann kommt die Moral”, said Berthold Brecht, the German poet and theatre director. In case of Tom Hayes a Mars bar seemed sufficient. In my conversation with Kate we took a different perspective. It is not only the trader, who needs to learn to navigate the corporate system. Any expert increasingly deals with a moral dilemma: their expertise becomes so deep, that their decisions and actions cannot be ‘managed’ by their managers. Technical opportunities may be boundary- less and beyond imagination. Technological advancement may even lead to delighted customers and short-term financial profit. However that is where the moral question just starts in all corporate industries: do I want to produce and sell more sugared and salted products to an increasingly obese world? Do I want to research and produce medical solutions that extend lives, without quality of life considerations? Do I want to create e-commerce applications that drive consumerism and debt?
The jury has voted that the individual in the corporate system has a personal responsibility. It is about time we develop our moral compass with managers and professionals together. Or do you prefer to go to lunch with the hierarchy, the bonus system, the culture or your job description?