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 will happen either.

The major funds are essentially looking for short-term return on investments, a return over three to five years. The need within society, however, is a 30 – 40 year investment pattern, covering everything from health care to infrastructure, to introducing new forms of energy. All of these challenges are technologically capable of being handled, but it’s their financing that prevents major infrastructure investment from being pursued.

Are the banks risk averse? – If they were, they would put their money into longer-term bonds that would support major capital projects guaranteed by the state concerning returns on investment.  More concerning is the culture in the City and Wall Street typified by fund-manager’s bonuses based on short-term transactions. Business is on a quarterly cycle – and every organisation is fundamentally judged this way.

With this new round of quantitative easing, it seems that all that will happen is the creation of paper, which guarantees inflation. What we will end up with is more of what we already have in the UK –inflation but with the average wage going up only around 1.7 per cent. As I wrote in a previous blog post, we are simply going to see more protests.

People question whether these trends are understood by government.  They are, and explicitly. The problem is that our governments do not have the courage to tackle the City or Wall Street, so we are back to the issue of who can handle the funds and the banks? Two types of population– the press, and the citizens who are fed up with the hardships they are facing and are taking to the streets.

So, how to change a whole system? When a whole system attracts people who hold a short-term view they are easy to label as selfish, but I think these same individuals are acutely aware of the vulnerabilities and lack of sustainability of shareholder capitalism as it is being exercised today. So the very individuals who are running the system are conscious that this cannot continue forever. But they don’t know what to do, nor how to change it?

It is important to define the nature of the problem. This is not a problem of finance; it is not one of return on capital over the short or long term. The problem is a political one, which asks ‘How do we change a fundamental aspect of the structure of our society to something different?’

It is perhaps worth noting that through history, some of the most successful revolutions have occurred at relatively high levels of national wealth. So we have to look at where wealth is concentrated and who is reaping the benefits from a distribution that is unequal. If we look at this distribution, we might be able to determine if we have a political issue or not.  In my view our challenges and problems are political, and this is where the problem lies.

Those who have the political will to do something are being marginalised. The political representatives on the various committees in Parliament are really trying to help the nation by drawing to the government’s attention the nature of the country’s concerns.  Government is criticised but in a constructive way through reports, analysis and the interrogating of witnesses, but they are getting nowhere.

Just as the will in Parliament to deal with the issue of an over-concentration of capital is forced onto the back benches, the will in the community is being forced into the streets. The lesson from history is that where there is a will, it meets with resistance. Capital does not want to share its benefits and will fiercely protect its assets for as long as it can.

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 potential in three areas – military; transport; energy.

If Europe became one country under one federal government, with a central bank that begins to control the way the government relates to the capital markets, innovative policy can be developed to much better operate in the military, transport and energy markets. This would have Europe as probably the most advanced nation in the world. Removing unnecessary layers of government and bureaucracy will see capital flow much more easily allowing the creation of new dynamic transport hubs which would dramatically increase employment.

The issue of the debt crisis can thus be seen in one sense as a financial concern, but it also raises a political question as to whether there is the political will to try and create Europe as a unified country. I do not see this happening in European political circles, but at the level of the citizen, there is an increasing awareness of what it would mean to have Europe disunited, with certain countries dragging the rest of Europe down.

What I am beginning to see is that at grassroots level there is a political awakening – people living through the current debt crisis and being forced to do something other than look to Germany to provide more loans. For Europe to have greater wealth a new political leadership is required.

Is there the political will to discuss these issues? Far from it, in certain circles one could actually lose their job for discussing these issues too openly. In actuality, the debt crisis is a political problem, not a financial one. There is a lack of political will to tackle it and as a result the Europeans will revert to trying to solve the crisis with tired financial measures.

The Euro is unlikely to fall apart – the markets will not allow it to, as they simply have too much to lose – so Europe will keep stumbling along with more loans, debt extensions and certain countries such as Greece having a far lower quality of life.

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 be important.  Representing our deeply held values and the metaphorical expressions of our beliefs, these accountability structures must change over time to continue to align with prevailing beliefs and core values. This global CSR failure also reflects the dynamic process which CSR programmes must undergo over time.

Emerging markets can also learn a valuable lesson from this case study as they continue on their path of economic development. Their CSR programmes should also reflect their own cultures’ unique social norms and be dynamic enough to respond to unprecedented threats due to increased stakeholder scrutiny and constraints on environmental and other resources.

Exploring this case study provides important theoretical lessons for companies in emerging markets and elsewhere to consider.  For instance, can increased regulation prevent corrupt or unaccountable corporate practices? Are voluntary systems of accountability fundamentally flawed and fuelled only by corporate disdain for regulation? And to what extent should markets be allowed to dictate the course of play vis-à-vis the more arm’s length yet expensive bureaucracy created by government regulation?

Corporate responsibility cannot be practiced if various personal attributes do not exist in the individuals within the company.  These consist of the four pillars of leadership, ethics, personal responsibility and trust, all of which are dynamic in nature. Incorporating these personal qualities can help improve the planning and practice of CSR programmes as well.

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 considerable purchasing capacity, but they are not free in the sense of people being able to move in and out of markets on an equal playing field. Without government intervention, the situation that we have is going to lead to such differences in wealth in society that we are going to have social disruption. Disappointingly, from what I have seen from the British coalition government and certainly the government in Washington, no attempt whatsoever is being made to control the banks, to control their purchasing capacity and even to control bonuses. So today the reality today is that the majority of the population is relying on a finance system that does not realise their best interest, as profits are made from short-term transactions and the bulk of the people in any of the Anglo-American societies are fundamentally paying to enhance the wealth of those institutions and individuals that already have considerable wealth.

When I was a child, I could not understand the Russian Revolution, and I especially could not understand how it was left unquestioned that large sections of the population, even villages, could be sold to a wealthy landowner. In a way, we are revisiting the past, because with the tremendous concentration of assets in few hands, not only are we seeing the sale of corporations and in the sense the sale of individuals with those corporations but we are equally seeing the ability of the banks to control virtually every aspect of life in our society, including the political process.

When I have talked to bankers about how sustainable our present circumstances are, bearing in mind the amount of funding that’s waiting in the City of London and in Wall Street for investments, they all agree that the next big crash will be in 2019. The present one is not the big crash; it’s the next one in 2019 that will really impact society. The Goldman Sachs behaviour with Facebook is simply one small symptom of how we are building up to financial inequality in our society. This will do us all no good, including Goldman Sachs.

There is therefore a case to split the roles of Chairman and CEO so that challenging the leadership is made realistic where necessary. Otherwise, professional auditors will simply be browbeaten to behave in certain ways by dominant characters. Professional boards would only solve part of the problem boards are currently facing.

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 not happen.

The real question is, will increased transparency around bonuses make any difference? It’s unlikely. What is really needed for effective change is a move from shareholder to stakeholder value. However there is no political appetite for that at present.

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.  In other words, all funds will go to some short term instrument and the longer term consequences are not considered.

What Cable wants is probably a pipe dream. The financial services market needs to be reviewed and there needs to be a move in favour of stakeholders, rather than short term investors for a safer, fairer system to be created.

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 could have a similar process applied to that of boards. Their roles are largely task led and the teams can discuss the issues that were addressed. By comparison, surgical teams do not talk as much and must deal with much more complex, intricate procedures.

The principal of teamwork analysis is detail and only through a detailed understanding of what happens in one team can transfer of learning take place to another team. However, I doubt whether that level of analysis has taken place in medicine to date. What is true is that you cannot simply transfer one protocol to another. Processes at least must be comparable.

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 is also a pressing concern to reduce the poverty divide. A recent study we undertook, that is yet to be published, looked at the remuneration of CEOs in the US compared to those in Russia, and quantified what the disparity in wages was to an average operative in those respective countries. In Russia this was 1552:1, but in US the disparity was even greater – 1996:1. Counter intuitively perhaps, the poverty divide in the US is therefore significantly greater than that experienced in Russia. More on this issue can be read in our book, ‘Geopolitics of Governance’, which can be found here.

The solution for the problem in Ireland is political. Is there will in the European Union to come together as one and is there will in Ireland to put this forward as a proposition? This is unlikely.

A recent FinanceWeek article shows the fear of a Euro collapse over the Irish bail-out and the risk that Spain will be the next to require assistance. It’s suggested that Germany will not tolerate this and will seek to create a separate Deutsch Mark zone with some other Northern European territories. However this probably won’t happen. The trauma that would be caused by dismantling the European Union trading zone, coupled with political tensions with France, and possibly Italy, Greece and Spain would make this nearly impossible.

Europe needs to decide its future now. Either it will operate as one country – although the political will for this is minimal, or it will operate as a united group. A new political movement is required to encourage further European integration, and any pressure is unlikely to come from established political figures – they have too much to lose. Instead academics, writers or former bankers are more likely to champion this movement.

Success of any movement will depend on a degree of financial backing. £20-£25 million will be required to get going, and that is on a shoestring. A number of questions need to be asked in Europe. Should there be two houses of parliament? What should happen with Brussels? What will be done about defence? What about NATO?

In order to create a nation state two factors must be in place: a currency and the ability to defend oneself.  What is needed therefore is a Continental army – a phrase coined by the English to describe George Washington’s army.  Only then, secure within the larger European power, will a small nation state like Ireland be able to operate on an even footing with larger economies.

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 assistance to make sure that they are ready for top management roles, so that when they arise they can take them confidently and provide valuable contributions. Australia made a bold move earlier this year when it rejected quotas and instead opted for a yearlong mentoring programme, where 56 chairmen of ASX 200 companies mentored 63 women.  Time will tell if it was a success but it is certainly a move in the right direction.

There are many examples of diverse boards that do not perform well – simply because they are not used to working in this way. If there isn’t diversity at the executive level, boards can have no chance of becoming accustomed to mixed environments as this might be the first time that many members have operated in this way.

For women, it is not only about having the training and confidence to take board positions,  but also the routes to boards can be difficult for women to surmount. Some firms use head hunters – who tend to be male and have a network of male contacts. Those that do not use them rely on their own network of contacts, again usually largely male.

There is no question that we need to nurture home grown talent – it cannot simply be imported. Yet in order to do this we also need to undertake cultural change, most notably our perception of people’s value and contribution. Undoubtedly one reason why there are many more women lower down the hierarchy in companies is because family commitments often mean they cannot work the long hours required by some corporations. Likewise women’s careers suffer when they take time off to have children. This needn’t be the case in an age where technology means that remote working from home is just as effective as the office, and women, even after being out of work for a couple of years, still come with experience. Just because someone is keen to be seen at the office at antisocial hours doesn’t necessarily mean their contribution is commensurate with their commitment.

Lastly the disparity in pay between men and women with the same roles also needs to be addressed. Women are dis-incentivised to put in long hours even if they are able to if male colleagues are earning more for the same job.

There are therefore many issues which must be tackled if women are to be fairly represented on boards. Quotas may not be the answer but there is plenty more that can, and should, be done.