Since 2008, the global financial industry has lurched from crisis to crisis, calamity to calamity, scandal to scandal, resulting in an epic loss of public trust in banking and financial institutions. In this groundbreaking book, John Zinkin, an internationally recognized expert in corporate governance, makes a strong case that the global banking crisis was due primarily to a failure of leadership and corporate governance. More importantly, he offers practical solutions for correcting those failures and restoring public trust, not just in banks, but in the capitalist system itself.
Drawing upon recent history and the distant past, Zinkin explains why, without effective corporate governance to balance out and focus the zeal and ambition of effective leaders, sustainable long-term value cannot be created.
Effective leadership, he observes, is morally neutral and can lead to good or bad outcomes. All too often leaders lose sight of their true missions and start believing their own hype. The more successful they are initially, the greater their self-confidence and their certainty in the correctness of their actions. The result is a dangerous hubris with no countervailing power to stop or change their reckless, self-interested behaviour, or to contain the culture of irresponsible risk-taking and unethical conduct engendered and fuelled by their examples.
Taking Napoleon Bonaparte as the benchmark of a “great, bad leader” he explores the stories of four “imperial CEOs” who personify the crisis of leadership currently plaguing the banking industry. These include Merrill Lynch CEO, Stan O’Neal; Jimmy Cayne of Bear Stearns; Dick Fuld of Lehman Brothers; and Royal Bank of Scotland’s Fred Goodwin. Like Napoleon, all four were transformational leaders who scaled to great heights before crashing and, in most cases, bringing their firms down with them. From their stories, Zinkin extracts powerful lessons about the major precipitating causes for failures of leadership, and about the paramount importance of good corporate governance, especially in an industry where the temptations for personal gain are so great.
Zinkin isolates the eleven chief characteristics of bad leadership and lays out the seven attributes required of good leaders. And, taking a global perspective, he provides useful benchmarks and best practices for ensuring good corporate governance and responsible leadership in banking and finance.
An important source of insight and guidance for corporate leaders and board members of financial institutions, Rebuilding Trust in Banks also is a valuable resource for regulators, advisors to financial institutions, financial journalists, academics and anyone passionate about creating sustainable business value in the financial services industry.
Praise for Rebuilding Trust in Banks
“The recognition that leadership and governance need to be viewed together, being either side of the same coin, is an important contribution of this insightful book. Companies need leaders with the ambition to set great strategies and the charisma to inspire organizations. But successful leaders also need the guidance of good governance, if over weening ambition, unrestrained risk-tasking, and the abuse of power are to be avoided. The cases of Merrill Lynch, Bear Stearns, Lehman Brothers, and the Royal Bank of Scotland are used to show how the leaders of these once successful banks were unrestrained by their boards, which led eventually to excessive risk, corporate collapse, and their ultimate failure. Written primarily for the directors of banks, this book has important messages for the directors of every major company, particularly where the roles of chief executive and chairman of the board are combined.”
—Bob Tricker, Honorary Professor, The University of Hong Kong, and author, Corporate Governance: Principles, Policies and Practices
“In addressing how to rebuild trust in banks by exploring the failures of both leadership and governance that led to the loss of trust in the first place, John Zinkin provides a practical guide for bank boards on how to restore, and sustain, trust going forward.”
—Ian Buchanan, Senior Executive Adviser, Booz & Company, and former Asia Pacific chairman, Booz Allen Hamilton
“Extremely thorough, comprehensive, topical, relevant, and user-friendly.”
—Youssef Nasr, Independent Director, Board of Directors, Brookfield Asset Management
“John Zinkin’s analysis of what it takes to make great banks is spot-on. His analysis artfully combines the latest thinking in leadership and governance. Indeed, strong governance with weak leadership will not take a bank very far, while a strong leader with weak governance may take the bank far in the wrong direction. His constant use of current cases and historical references gives life to the analysis, inspires the reader, and makes for a fun read. Many bankers can profit from the reflection and from the tools and checklists proposed to assess their own or other’s institution. This should be a must-read for the senior manager of any significant financial institution around the world.”
—Didier Cossin, Director of the IMD Global Board Center and Professor of Finance and Governance, IMD Business School
“John Zinkin’s exploration of leadership, governance, and regulation after the financial crisis is thoughtful, practical, and wise. This book will be an indispensable prop for directors of banks around the world.”
—John Plender, columnist, Financial Times
About the Author
JOHN ZINKIN is Managing Director of Zinkin Ettinger Sdn Bhd and a faculty member of the Iclif Leadership and Governance Centre, Malaysia, specializing in training boards in ethics and governance. John previously served as managing director of corporate governance at the Iclif Leadership and Governance Centre, Malaysia. Prior to that, he was CEO of the Securities Industry Development Corporation (SIDC)—the training and development arm of the Malaysian Securities Commission, where he was responsible for taking the company from its incorporation to financial self-sufficiency. John has more than forty years’ experience in business, twenty-eight of which have been in Asia, where he held senior line management and corporate strategy/business development positions in major multinational manufacturing, marketing, and consulting companies.
In 2013, John was awarded the Panglima Makhota Wilayah (PMW) by the federal government of Malaysia, which carries the title of Datuk for services to the nation. John attended the London Business School where he received an MSc in Business Administration, and Oxford where he received a BA in Politics, Philosophy and Economics.
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