How Individual Firms Can Prevent A Leeson Incident From Happening To Research Paper

How Individual Firms Can Prevent A Leeson Incident From Happening To Them - Research Paper Example This research paper tells that the collapse of Baring Bank was primarily due to one rogue trader, named Nick Leeson, who was making fraudulent transactions. Leeson occupied a great deal of power in Barings Limited, as he was both the Chief Trader and Head of Settlements, which means that he could make any trades he wanted without any oversight – the fox was in charge of the chicken coop, so to speak. What this essentially meant was that Leeson was able to cover up losses and report them as gains, because, as Head of Settlements, which was in charge of reporting trading losses and errors, he was able to be dishonest in this way. This was brought to the attention of the auditors, which stated that this set-up provided great risk, but Barings did nothing to rectify it. In the end, it was this lack of governance that proved to be the undoing of the firm, as Leeson single-handedly brought the bank down. The Leeson affair was caused by a number of different factors. First, according to Hoch & Kunreuther, bad decisions played a large part in fomenting the conditions under which the scandal occurred. One of the bad decisions was on the part of the managers, who looked the other way regarding Leeson because their emotions got in the way. The managers liked Leeson, as he initially was successful in trading, and the emotion of greed got in the way of closely scrutinizing him. Moreover, Leeson had very little experience in trading, and he had some personal bad debt that was not disclosed in his application for a trading license. All of these should have been red flags, however, they were overlooked by the individuals in the hiring process and by the managers who could have prevented Leeson’s reckless trading, simply because Leeson was liked (Hoch & Kunreuther, 2001, p. 6) Hoch & Kunreuther (2001) also state that there were other reasons why there were so many bad decisions that were made in the Leeson case. One of these is that the company relied too much on intuition. Another is that they were in too much of a rush – they felt that they must capitalize on the Far East market as quickly as possible, without implementing the

Fourth Estate Essay Example | Topics and Well Written Essays - 750 words

Fourth Estate - Essay Example The news media can also alert the nation to events that may otherwise not have been public, and may perhaps alter the social style of the day. The press are absolutely instrumental in advocacy and the presentation of political (and social) issues (Powe, 1992). One of the most important examples of the power of the Fourth Estate can be seen in the coverage of the Middle East. Every newspaper or TV news channel will present at least one article on the Middle East daily, with much (if not all) of the coverage being negative. Although the press generally try to maintain some form of neutrality to preserve their integrity (Schultz, 1998), there are some areas in which this cannot be upheld in full, and the Fourth Estate has to ensure that it refers to issues in the way that the readers and viewers can understand. The coverage of the Middle East is a perfect example of this. The recent troubles in Libya, for example, have been presented by the media in the Western world almost exclusively from a Westocentric perspective, ensuring that the people of Libya are almost constantly referred to as victims with Gadaffi being portrayed as an evil dictator (e.g. Cobain, 2011). Whatever the personal perspective on this issue is, it is almost impossible to find any news sources that describe the troubles in any other manner; the role of the Fourth Estate here is to uphold the view of the area in this possibly over-simplistic manner. The Fourth Estate has shaped society in this manner, and the majority of people in the Western world would agree with the general principles of this matter. From the description of the concept of the Fourth Estate given above and the example of Libya, it is easy to see that the press easily fills this role and holds an immense social and political power in these first world countries, who usually have an established democracy and a large