I have friends who have worked accounting and finance in investment banking and these people had their jobs threatened if they pushed too hard in terms of diligence or accountability.
I agree with your point that oftimes it isn’t criminality that drives the decisions, but stupidity or greed or a combination of the two. It used to amaze me how many MBAs were absolutely ignorant and not just about the financials, but basic business fundamentals. Same goes for many of the CPAs I worked with. Scary stuff.[/quote]
I know this happens all the time. But – and I think you’ll agree – it’s normally not a situation where the Person In Charge is saying, “Hey, you gotta approve this transaction even though I know it’s total shit.” Although that probably happens sometimes. It’s generally a case where the PIC is saying, “Look, I know it’s not perfect, but it’ll probably work out fine – just approve it.” And they actually believe it.
One of the problems in our business culture – and I don’t know how it can be fixed – is that optimists tend to occupy the senior ranks of management at most companies. Why? Because over time the economy grows and over time the optimists are right more often than the skeptics. It’s just very difficult for a perma-skeptic to run a company, particularly a large one, because s/he’ll look too “dumb” (re: conservative) too much of the time to succeed. So as the optimists rise to the top together, shit gets loosey-goosey below them and when things start to slow, all manner of hell breaks loose. Witness now.
I find very few skeptics and folks who like to hear folks say “no” running large companies. Generally big companies are run by uber-optimists and yes-men who sucked up to the yes-men that they replaced. That’s just the nature of things.
The skeptics generally start their own companies. Which remain small, for better or worse. High growth almost requires some degree of irrational optimism. Again, there are exceptions, but I think this is an accurate generalization.
