The recent announcement that the Bank of England considered £75bn of quantitative easing (Telegraph, 19 th October) raises the question of ‘what impact is £75bn going to have (a second round of quantitative easing) when so much has already been put into the nation?’. As I previously discussed, we face the problem of this money sitting static with the funds and banks rather than being invested on infrastructure projects which the nation so badly needs.
Is there now going to be Government pressure that will force the banks to distribute funds, particularly to small business, to revitalise the economy and increase employment? I suspect not! Will the government split retail banks from investment banks, so that the investment banks can take risk but without affecting everyone else and the retail banks provide the slow and steady platform that is needed? I don’t think this [...]

Europe’s debt crisis is worsening, as noted in this recent Time article by Michael Schuman . We can see this reflected in the markets from the lack of mobility. We have countries that have not managed their affairs particularly well, such as Portugal or Greece, where they have created a high level of debt without nurturing their wealth creation sector. But equally, certain investment entities have made it their business to deal with bad debt situations and hence make considerable amounts of money out of the present circumstances.
The question is, as the debt crisis gets worse, what is the way forward? One option would be the break up of the Euro, which would see Europe becoming a series of separate states with separate borders and passports and currencies. Or Europe could go the other way and become one singular country. This unified Europe would have [...]

The excerpt below is from a paper of ours which will be published in the Special Issue of the Corporate Governance Journal and presented at the 2011 colloquium of EABIS, the Academy of Business in Society .
We have co-authored the paper with Isaac Mostovicz .
The paper will be published on September 5th and looks at the core values which must underpin CSR programmes if they are to be effective.
On April 20th, 2010 an explosion on the Gulf of Mexico Deepwater Horizon oil rig exposed the United States to an historic ecological disaster.

This episode illustrates the limits of CSR programmes currently undertaken by global businesses. The logical rules and regulations which business and government leaders created did not work to exemplify the broadly shared social values that US society deemed to [...]

Bethany McClean’s article in Slate questions Goldman Sachs’ deal to invest $450 million in Facebook and to raise another $1.5 billion from its own investors, raising the question: just how fair is this?
In one sense what Goldman Sachs is doing is nothing new. During the crash of 1929, we saw these same sorts of behaviours by the key financial institutions of the time. Asset prices were low and the banks were calling the shots in terms of ownerships. However, while eighty years ago the banks tended to be the owners themselves, today banks are acting as agents on behalf of their own wealthy clients as well as being owners themselves. The situation is absolutely and distinctly unfair.
The position that we are in today is that we just do not have free markets. We have open markets that are open to people with [...]

The case for professional boards, as set out in an article in Harvard Business Review by Robert Posen, is no surprise. The lack of attention paid by boards to the current economic crisis has been problematic. There have been two factors, both in the UK and US that contributed to this.
•    The lack of knowledge of board directors about the organisations that they serve and the lack of time to get familiar with it.
•    The dynamics of the board: courage, resilience and insight are required by board members to challenge the status quo and add real value
The proposal for professional boards is therefore on the horizon. It would undoubtedly provide a far better level of professional input in assessing risk, nominating directors etc. However, this will not improve the boards’ dynamics. This is a leadership issue and that is where the role of the Chairman [...]

The David Walker update on bankers wages (following his 2009 report) which calls for more open rules for bonuses in Britain, is welcome. However, it is unlikely to make much difference.
Recent research that we conducted found that there was an estimated £450 billion awaiting investment in the City of London alone – more than twice the upper estimates of the UK national debt. This is a result of short termism and bonuses. In order to make the big bonuses bankers must focus on short term gain, which is also demanded by shorthold shareholders.
Something needs to be done if we are not to see similar economic collapse in future. Yet the governments’ actions to the recommendations will be tempered by the fear that they will cause a migration of capital. While this is a risk, I personally believe that this will [...]

The Independent recently highlighted the clash between Vince Cable and George Osborne over the reform of bankers’ bonuses. One bone of contention is Cable’s wish to make bonuses over £1million public. The real issue between the two here are concerns of the migration of capital, but this probably won’t make much difference. An article in Director covers Cable’s drive for responsible capitalism, however it is individual corporations that must be responsible, not just the financial services industry. At present, both the UK and US is hooked on short term shareholder value.
In recent research that we conducted it was estimated that £450 billion is awaiting investment in the City of London alone. The estimates for Wall Street range from $1 trillion to $2.8 trillion. The funds are waiting for investment and M&A when an opportunity that is considered sufficiently lucrative arises.  [...]

An article by Jennifer Goodwin on Business Week on how lessons from flight crews can help surgeon’s works better highlights just how important teamwork is. The idea that you can learn from one team to another is good. In reality, it is all about details and such transference is not easy.
I have spent some time using psychological instruments to analyse how teams operate and how effective they are.  Disfunctionality in a team at any one time is likely to have a ripple effect on the wider team, as well as the organisation. Sectors and teams need to be analysed individually so that the relevant details are captured. I cannot apply the same instruments to analyse boards to surgical teams, but I can apply them to teams with similar processes or from a similar context. Flight crews, for example, are one type of team that [...]

Patience Wheatcroft’s article in the Wall Street Journal on the death throes of the Irish economy highlights a major concern of a small country in a mass market world. The situation in Ireland will be dire for a long while yet. In order to pay back the £85 billion bail-out loan, further cuts will see the same level of Irish austerity as was experienced there in the 1950s and 1960s. The issue here is- will European economies continue to work as individual nation states?
An Irish banker recently told me that he could see the current situation coming, but was forced to adopt the instruments that are used in the UK and US. If he didn’t he would be sacked. Ireland is a small economy. In order to create longer term infrastructure investments as required in the UK and US a unified Europe is needed. [...]

There have been several articles recently on the issue of the representation of women on the board. This is a well-worn issue which deserves greater attention if it is to be resolved. There are undoubtedly socio-political reasons for ensuring that women are represented at board level, but the real issue is how you tackle the lack of female presence here.
Introducing a quota system is not the solution. That devalues the work of the women that are selected on this basis. Instead, education and mentoring to ensure that women are ready for a job on the board are much more desirable measures. In order to make sure that women can be elected to the board, there needs to be a pipeline of women up to the job at executive level. At present this does not appear to be the case. Women therefore need support and [...]