Reuters informs us that Bank of America sues over LaSalle sale. Which was of course to be expected. We have also come to know that Mr Groenink will not resign (given that the decision to sell LaSalle was a joint deciscion of Executive and Supervisory Board). And there was also the news that the higher management of ABN AMRO has informed the press indirectly that it is open for a cooperation with Fortis.
Analysts are also discussing if and which role our supervisor for the securities market should/would have had in the process surrounding the bidding. Shouldn't they have ensured due process more than just checking if the bidding statements are compliant with the current rules? And another analyst points out that the central bank, in its role as supervisor of ABN AMRO, has also evidently not delivered on their promise to very carefully monitor the further bidding process. Where were they?
So what does the continuing story of ABN AMRO tell us so far?
I think it tells us that big companies may just have become so big that they become steerless bureaucracies in the hands of incapable leaders (or groups of leaders) which are unable to think properly and independently. Most likely the financial compensation packages for leaders increase the groupthink processes near the top, leading to biased visions of reality and of what is and isn't right. Supervisors claim to be supervising but don't effectively substantiate their role. Meaning that indeed it is left to the market (shareholders) and the courts to correct the wrong vision/actions of the managing board (rather than Commissioners or supervisors).
Now we could try to increase the competencies of supervisors. Or change the financial compensation packages. But in the end all change will have to come from the inside. And my guess would be that the independent mental attitude required to contribute to correcting or preventing these odd groupthink processes is more of a Buddhist/Zen-like disattachment of money and status. Where people are not afraid to suffer prestige, financial loss or status loss when they speak up their real analysis.
But, how likely is it that anyone with such an attitudes will survive in those coherent topmanagement groups? And where could one find such attides in a society which values money beyond everything?
