Dave: I had the “privilege” of working with a Wharton MBA back in my corporate days. This guy, who was part of the production culture in our company, could not read a financial statement. I’m not talking about the more arcane aspects of the financials, I’m talking about the Income Statement and Balance Sheet and Statement of Cash Flows; the basic elements. Didn’t have Clue One as to what the numbers meant.
He did, however, understand bonuses and meeting sales targets to trigger those bonuses. He wasn’t alone in this, either. I’ve worked with quite a few CEOs and Senior VPs who were out to lunch when it came to the numbers.
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.
