Lehman Brothers: leadership vacuum in marketplace
September 29th, 2008
“Everything rises and falls with leadership” is a mantra some of us are familiar with. But what kind of leadership? In the past few months I have reflected on this simply because of news and events in the religious, financial, and political realms. From news of Paul Cain, Mike Gugliemucci, and Todd Bentley to the corruption of former president of Taiwan, and the turmoil in Malaysia, and the fall of big financial institutions like AIG and Lehman Brothers. These are all led by very capable, visionary, well connected, and obviously gifted leaders. I mean the financial muscle of the financial giants meant they could hire the best brains and talent available, even better than those in politics, and perhaps even industry.
However the world economic plight we have all landed in is the fruit of the flawed leadership of these talented, bottom-line focused, capable leaders. It goes to show leadership does rise and fall again when you have leaders with ability but no integrity. Together with these leaders we have worshipped the bottom line of maximum profits and allowed greed and fear unfettered reign in the marketplace. Again we have underrated integrity, character, righteousness, and good motivation and will have to pay a steep price for our dementia.
The wisdom of the Bible could have helped everyone but who would listen? We prefer the latest research from Wharton business school to the ancient priority given to good character. St Paul listed the qualities to look for in a leader, and it contained mainly character qualities, with only two abilities:”able to teach” and “able to manage his family”. Most of the other qualities are character based like temperate, honorable, hospitable, not hot-tempered, nor out to make money, kind, peaceable, sensible, mature, repected by others. Absolutes and business ethics need to make a big and permanent comeback to business and the world of finance. After Enron and Arthur Anderson, topics like “leadership by character” and “business ethics” made a popular but ephemeral appearance in the marketing of many business schools and the conference circuit, only to disappear underground into dark cavernous blackholes.
All this does point to a great challenge for the church today: how more Christians can assume positions of leadership in such places and be salt and light in these dark places where our Christian values and convictions will stand out and be most needed. I am sure there are Christians up to the challenge of applying God’s grace, wisdom and ways in the world of politics and finances. I am sure there are young people who are willing to answer this call of God.
Entry Filed under: Society
Making money and formulating financial products are the traits of “good leadership” in Wall Street and Shenton Way. Financial prudence and contentment are not the virtues the world looks for in a CEO.
Can money be made with wise stewardship of other people’s money?
Arent some of these bankrupt bankers already nominal or declarative Christians?
The US president is a ‘devout” Christian, has it made a difference?
Humans are sinners, can we ever reach God’s simple ethical standard ever?
We do things right but can we ever do the right thing all the time?
The scorecard is very poor except for very rare instances of divine intervention.
Even the anointed screwed up many times……Gideon, David,Moses and many, many…………
Blogpastor,
For those of us who are in a relationship with Christ, our first and foremost objective in business should be to conduct our business affairs in a manner which is honorable to the gospel. This is particularly the case where we are put in a position of leadership.
Yes, money can be made with wise stewardship of other people’s money, especially if everyone can collectively agree on the principle of social responsibility and solidarity. This has not been the case because man’s sins are also social and structural.
One person’s idea of greed is another man’s idea of basic needs. A guy who owns a sail boat will sooner or later cultivate a need to own a high priced yacht as an upgrade. They system is geared to help rich guys get their yacht. The system, especially under goverment purview, is also geared to also help folks who dont own a home with easy monetary arrangements to buy homes. But can this realistically be done? It can be done if credit loans are available on the cheap. Just print money and peg its value on returns in the future.
Shouldnt the guy who wants a yacht give up this luxury so that resources needed to buy the yacht be released to help the guy who wants to buy the house. The politically correct thing to do is to help BOTH - the guy who wants the yacht and the guy who wants to buy his first house, at the same time.
Unfortunately economic forces are NOT aligned to please both the parties. Trying to manage these needs, be they competing or parallel, has been very difficult. Its easy to depend on market forces. Regulation is tedious. So we use the free market to determine how and who gets their needs met first. And, almost always, its the guy with the yacht whom the market favors because he has the purchasing power or the credit rating to buy a yacht.
The issues above are for Christian politicians, bankers and businessmen to look at afresh.
There are 2 golden rules - one for Caeser’s world another for the kingdom.
He, who has the gold rules……(custody, use, ownership, stewardship) and
Love your neighbour as yourself. There does not seem to be anyway of straddling this divide.
The overnight 777pt plunge on the Dow is only a forerunner of the things to come…..ask yourself how a $15 Trillion economy has managed to manufacture $60 Trillion of credit default swaps? and then there are those credit card debts…..
The US housing mortgage mess is “only” $15T - probably about 85% still performing now and only 10 US banks have failed so far. Never mind the European banks. Seems like a western credit crisis similar to our asian currency meltdown.
Seems to me current Bank failures are not that different from Church failures, both are victims of light penetrating and waking up the “sheep” to the falsehood promulgated by self proclaimed (unregulated) authoritative ‘experts’ that become exposed by circumstances.
God has a sense of humor exposing our naked human emperors in very ironic circumsatnces. Witness treasury secetary Paulson(ex Chairman Goldman Sachs) trying to persuade congress to give more money to the inept, greedy and incompetent that loss all the money gambling in the first place.
The “deleveraging” that has to take place to untangle the current mess starts with ensuring the regulators, rating agencies and bankers keep their hands in their own pocket.
Mega banks have failed, will mega churchs go the same way.
Capitalism and globalization is about balancing greed and fear.
What would Jesus do???
allow me to recommend a book by Naomi Dowdy
“Moving on and moving up in the marketplace”
easy read. poignant points.
I agree with journeyman on most of his points.
Devout christians are already in the market place and they were part of this system which was fed by greed and excess. No one intentionally, especially christians, go out of their way to make life difficult for retirees and their life savings but the system is based on “rolling the money” to fund capital investments and mistakes like the Iraq war. And there is nothing really illegal about all of this. Bad credit however catches up with us and foreclosures begin.
The values and prudence that might have prevented the mistakes are not monopolised by Christianity.
It can be argued that Buddhist values (or some other religions’ values) could have contributed just as well too to a different outcome.
Teaching against greed and selfishness, promoting contentment and compassion are common to other religions and even atheism or agnosticism.
Contentment instead of being greedy and so on are not the monopoly of religions but are common human values. What is unique about Christianity is not all these values but something else.
Even if the leaders of a financial institution leaves religious/personal values outside the office and not letting such values influence their business decisions, the financial crisis might still have been averted base on skilfulness in risk management and skilfulness in financial and economic management. For example, risk management would advice one to ensure a certain limit to risk exposure, and one important rule is to take care of the downside - when insufficient attention is given to the downside risk, an institution would then have to rely on luck - and when luck runs out, or when one becomes unlucky, this is what happens. A lack of proper management of downside risk can lead to fatal outcomes.
Risk management is a euphemism for gambling with “a plan.” You can use algos,
modelling but ultimately it will be an emotional Buy/Do nothing/Sell decision.
Now if there was insurance to guarantee your capital, then you can take a bigger gamble.
If your position is gigantic or affect alot of people, then the poor (Government) will always bail you out. FreddieMac, FannyMae, AIG, Citibank……..if were Bear Stearn or Lehman or Wacovia. Governments will never wipe out the people who will re-elect them except when they have no more means to effect a positive outcome but they will try, try until “electoral death.”
The fact is nobody can predict the ultimate outcome.
The game is about balancing
1:(GREED-FEAR) makeup and circumstance of the player(s)
2(EUPHORIA-PANIC) the collective players’ herd mentality.
Leave too soon and you gain little, stay too long and you get wipe out.
Market capitalism is completely impersonal.
It is a question of one’s compulsiveness or addiction to gambling. Once you take a position in the game, you have assumed that there will be a greater fool following you or if you are smart like Buffet or Graham, you will know that just sitting on a “value buy” will ensure your future wealth.
Followers of Jesus would try to live and invest according to Matt 6.