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Posts Tagged ‘Banks’
The Conundrum of Reputational Risk
December 22, 2010 | 
Author 
The lawsuit filed against Ernst & Young for their auditing of Lehman Brothers and their acceptance of the now notorious “Repo 105″ manoeuvre that Lehman used to hide their leverage in their quarterly filing and thereby mislead investors as to the true state of their finances has revealed that some of E&Y’s auditors were concerned and brought up the issue of “reputational risk”.
Reputational risk is growing more fashionable as a concept among strategy thinkers but rarely has much traction among the board or within the C-Suite where a fight between quick profit and long term reputation is usually a round one knockout to profit. Reputational risk is a function that considers the risk of reputation damage as one of the criteria in decision making. The question goes: “what will people think about us or our products if we make this decision, it might be profitable but long term will we lose out as our reputation suffers for being dishonest, etc.” Read the rest of this entry »
Posted in Company Reputation, HR Reputation, National Reputation, Personal Reputation, PR / Public Relations | 
Tags: Auditing, Banks, Business/Finance, Derivatives, Ernst & Young AG, Ernst & Young s.r.o., Finance, Goldman Sachs, Investment, Investment banks, Lehman Brothers, Lehman Brothers Holdings Inc., Repurchase agreement, reputation, Reputation Management, Reputational risk, Risk, Society | 
1 Comment »
How low can Lloyds Go?
Poor Lloyds HBOS. They are the banking equivalent of Gordon Brown: whatever they do makes them look like either stupid or dishonest. The latest economies of truth feature the revelation that HBOS had received substantial amounts of state aid before their takeover by Lloyds Bank. Shareholders are asking why they were not told this “material” information at the time of the takeover. Whatever the bank says, shareholders won’t be happy as the transaction must be one of the largest destroyers of shareholder value in business history.
Of course, Lloyds is denying any worngdoing. Is there a course these people go on to teach them how to deny everything.
This comes a week after Lloyds HBOS denied any further relationship with the “best of banker of his generation” Peter Cummings who was seen entering their headquarters last week. If they are not doing anything with him, why was he entering the building?
Banks have stooped to new lows when it comes to thinking through their reputation management. They still don’t get it when it comes to transparency and sentiment.
The problem for LloydsHBOS is that management reputation is entirely destroyed but as ever, management don’t see it that way and continue to plough on. The Armada anyone?