By Bill George Published Oct. 15, 2009 1:46 a.m.
“In the summer of 2008, Lehman Brothers and AIG were renowned power-players and titans of finance.
They were innovative, profitable… nearly untouchable. Now, they are insolvent.
These are just two in a long line of now-clichéd Wall Street stories: successful company—under pressure to earn bigger profits faster—succumbs to appeal of short-term gains, makes bad bets, and goes bust.
Negligent and cavalier investment strategies created overly-leveraged balance sheets, causing these companies, and many others, to place incredible strain on investors, the financial system, the U.S. government, and American taxpayers. Their collapse was monumental and the aftershocks are continuing; worldwide, no one has been unaffected by the ramifications of this collective short-term profit seeking.
Where were the CEOs with plans for the long-term viability of these companies? Where were the board members who were supposed to be minding the store? Where were the shareholders with the knowledge and foresight to shout ‘STOP?’”
About Bill George | Bill George is professor of management practice at Harvard Business School and author of 7 Lessons for Leading in Crisis, True North, and Authentic Leadership. The former chair and CEO of Medtronic, he currently serves on the boards of ExxonMobil and Goldman Sachs and previously, Novartis and Target. Read more at BillGeorge.org, or follow him on Twitter