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January 25, 2008

American College President authors new book on scandals -- Crisis Leadership Now

Today's European Trading Scandal Highlights Need for Crisis Planning on Corporate Agenda


Management


Just made announcement by European investment banker Societe Generale that a single employee allegedly committed a $7 billion case of trading fraud points to the need for employers to heighten safeguards against internal and external threats, according to a recently released book by the President of The American College.

"Stock option backdating, subprime losses and credit card theft represent market exposures that raise questions about Board governance and internal controls," notes Laurence Barton, Ph.D. "Where were the auditors? Who has accountability and where is the outcry," he notes.


American College

Barton, a widely quoted analyst and professor at The College who is the former vice president of crisis management for Motorola worldwide noted: "Crisis management is more than safety awareness - what can companies do to prevent all kinds of threats, from workplace violence to structural failures and product recalls? We are witnessing a profound lack of quality assuredness in management oversight that extends across industries."

His new book, Crisis Leadership Now, was released by McGraw-Hill. In the book, Barton analyzes more than 400 scandals that impacted notable companies including jetBlue, Marsh, Virginia Tech, Hewlett-Packard and British Petroleum. He found that a lack of crisis auditing on risk exposures often contributes to a problem blossoming into an organizational crisis that can affect the financial condition, brand and recruiting power of an organization.


Societe Generale

Photo: Societe Generale Loses $7 Billion to Fraudulent Trader: The Bank of France said on Thursday it would open an inquiry into a fraud at French bank Societe Generale which could have a 4.9 billion euros (3.7 billion pounds) negative impact on the group.


"Society Generale's credibility and potentially its future is on the line today," he adds. "A recommended roadmap is to admit to a profound lack of controls, the absence of detailed, daily oversight and the need for transparency. Offers of executive resignations are not enough. Winning back the confidence of the investment community requires a massive organizational commitment to detailed accounting forensics by external parties," he adds.

"You cannot rely solely on your insurance company to bail you out," Barton notes. "Senior executives must own risk and crisis planning, assess the preparedness of their human resources, security and legal teams to harness solutions quickly when a risk emerges, and they must be flawless at communicating real-time," he adds. "Whether it's Virginia Tech, a mall shooting or a product recall, we still come back to basics: What did you know? When did you know it? What did you do about it?" he asks. |GlobalGiants.com|

Source: The American College


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Edited & Posted by Surender Hastir | 7:57 AM | Link to this Post


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