The Fourteenth Banker Blog

June 16, 2010

Accountability and Freedom

Filed under: Running Commentary — thefourteenthbanker @ 6:00 AM

We live in a society where there is little accountability for individual decisions that are made in a group enterprise. This article is by an aggrieved victim who actually won compensation in a court of law.   However, the damages were paid by a famous upscale enterprise and there was no individual accountability for fraud.  Quote:

But over those same two decades I’ve grown disgusted by what corporate America has become. Several words come to mind: venal, corrupt, conniving, irresponsible, unaccountable, amoral. All are accurate, but none alone captures the extent of decay that has left us with a truly rotten system.

Corporations have mutated from organizations that once generated jobs, products and prosperity for the country into voracious, impenetrable monsters legally required to put their own selfish interests first. The result: Corporations now enjoy powers and privileges historically reserved for monarchs, and, like monarchs, the people who run them are largely insulated from the consequences of their actions.

Even in many of our psychological theories we discount the responsibility of individuals by saying that their brains tricked them.  Note this post by James Kwak in which he rebuts a NYT piece which lays primary blame for our crisis (plural) on irrationality in decision processes.  That irrationality is there and should be studied and mitigated, but it does not replace the moral dimensions or consequences of actions.

The problem isn’t that people have cognitive biases in assessing unlikely events. When you’re dealing with a big company like Citigroup or BP, you have many people applying lots of clever thinking to these problems. The problem is that there is a systematic bias within these companies against certain assessments and in favor of others. That is, the guy who shouts, “Danger! Danger!” will be ignored (or fired), and the guy who says, “Everything’s fine, the model says disaster can strike only happen once every hundred million years” will get the promotion — because the people in charge make more money listening to the latter guy. This is why banks don’t accidentally hold too much capital. It’s why oil companies don’t accidentally take too many safety precautions. The mistakes only go one way. You have executives assessing complex situations they don’t even begin to grasp and making the decisions that maximize their corporate and personal profits. (Is BP’s CEO going to give back years of bonuses now?)

So to the question of sin.  Religion has always dwelt on these topics the most and sometimes very well.  But one man’s sin is another man’s folly and another man’s license.   The elementary rule may be summed up in many faiths or no faith.  “First, do no harm.”   “Love your neighbor as yourself.”  ” Do unto others…”

So what we have today are systems that transgress against society by violating these most elementary and universally held values. And we allow no individual consequence of any proportionality to the transgression.  Should we be surprised with what transpires?


I believe that there are consequences to the individual and that part of the sin of management today is the promotion of unethical behavior with the mistaken belief that it is somehow harmless or that the individual actually benefits, say from higher compensation. They foster in individuals unrealistic thinking which is actually self-destructive. Such “sins” as avarice can have tragic externalities, as we have found.  But the bad thinking also serves to trap the individual in preoccupations with fear and fantasy.  Fantasy about the future, fear of losing it.  Fear of being found out.  Fantasy about successes, defined by metrics which may mean nothing, and are often falsified, which support false self concepts.  In these mental preoccupations we cannot truly be in harmony with ourselves or others. This is the shortest of all sermons.  But our corporate systems do harm in the most profound ways and there is no escaping it.

That is part of why I write.  I write to give voice to the suffering of employees everywhere who long to be free to do the right thing.  I support restoring consequences for actions as a way to help people “wake up” and ultimately claim their freedom.


  1. This is a fantastic article with some very poignant points, that if not heeded and acted on will continue to degrade the capitalist system which we all treasure and thrive from. I recently began reading a blog about leadership from Dr. Rupert Loyd (can be found at and this article speaks to many of the same thoughts and practices that are missing from “big business” today. I also write about these components in my blog (at find that no matter what business or industry that you are in, there are some basic truths that exist.

    One of my favorite statements is that you manage things, and lead people. When I think about these big corporations that are making these judgement calls that are quite obviously self-serving and money based, it makes me wonder if they ever even think about the people that they should be leading. On the flip-side of that coin, I have no hesitation in speculating that the reason that so many people in these organizations choose to be that person that says what the “leaders” (and I use that term loosely here) want to hear: that is what they are lead to do by those around them! Much of what we do is based on the environment that we are in, even at work. This means the culture, the values, the mission, the vision…unfortunately if the employees of organizations that don’t have the proper ones in place, or the right mechanisims to allow them to support these properly, then it must be up to the employees to decide whether to stay and comprimise their own values and beliefs, or to find somewhere that there is a better fit.

    As hard as it is to accept and swallow, we as human beings have the option to stay in a workplace and help it to succeed, or to leave and support a different organization that we believe in more to succeed. Each and every person that works for these mega-companies must realize that they hold a large part of the control of that organization. As I tell anyone that I work with, the human capital of an organization is the most important piece; without the human capital, an organization simply ceases to function at all. At some point, if the company itself does not choose to rectify these atrocities that they perpetrate, then it becomes up to the people that work for the company to rise up at every level and push for the change that they know needs to happen.

    Comment by Christopher M. Janney — June 16, 2010 @ 8:08 AM | Reply

  2. Nice post. Thank you. Completely agree.

    Also would like to point-out the blatant corporate fallacy that if everyone’s (ie. your competitors are) maximizing profits via lowest common denominator management, you better do it too.

    The best corporate strategy to beat a herd mentality is to differentiate yourself. The best way to grow your business, and win competitive points in the industry is to treat your clients right. Happy, fulfilled employees make this happen.

    Google provides all kinds of benefits for their employees, treats them as assets, and strives to ‘Do the right thing’ and they are THE industry leader. The old HP used the same mentality (The HP Way) to win the PC wars. IBM became the largest, most successful company in the world by establishing a kind of corporate socialism that included employee housing, country clubs, lifetime employment and many other perks that demonstrated they considered their people their best asset.

    Companies win big-time when they employ these tried and true methods – and as is now manifestly evident, they lose big time when they manage to the lowest common denominator. The old Citicorp vs. the new Citigroup is a perfect case study in this principle. So is HP. Proofs abound.

    So, as we scratch our heads wondering how to effect the change we want – a change which will, ultimately, drive our firms to leading positions – we only have to look to ourselves. Spread the message within your firm. If your firm’s too dense to get it, find another. Seek-out and patronize firms which you know employ the principles of good management. Buy from them instead of others, vote with your dollars. Invest in them. They are not hard to find. Just consider how they interact with you, their customer, and that will give you a good idea.

    I, personally, will never put my rather substantive banking business with any of the ‘top’ banks anymore. You shouldn’t either. Nor will I do business with any firm who considers their customers so minimally that they outsource customer touch points to lowest common denominators. If I call for service, or to ask a question, and get an Indian call center. I hang up, and make a mental note never to buy from that firm again.

    Vote with your feet, and put your business where your heart is.

    Comment by Lucy Honeychurch — June 16, 2010 @ 8:13 AM | Reply

    • While I think one time targeted taxes in different countries are poor policy, it is notable that again employees are sheltered by the corporation.

      UK Tax to Cost US Banks $2 Billion
      Financial Times | June 16, 2010 | 05:46 PM EDT
      US banks will foot a total bill of about $2 billion in their second-quarter results to pay for the UK tax on bankers’ bonuses — a charge that could significantly reduce earnings at financial groups such as Citigroup [ C 3.99 +0.00 (+0.00%) ], JPMorgan Chase [ JPM 38.52 +0.27 (+0.71%) ] and Bank of America [ BAC 15.87 +0.071 (+0.45%) ].

      The amounts to be paid by US banks, with Goldman Sachs alone in line for a $600 million -plus charge, will contribute to a windfall of £2.5bn from the levy, larger than expected by the British authorities. Analysts say the tax will be a negative factor when US banks report results for the April-June period next month, reducing earnings per share at Citi, JPMorgan and BofA by 10 per cent or more.

      Comment by thefourteenthbanker — June 16, 2010 @ 5:26 PM | Reply

  3. I view the corporate dilemma of ” capture” of individual moral choice as endemic to all organizations. The depth of depraved capture of individual moral choice increases as the corporate organization ages and solidifies. I see no difference between the corporation, the government department or any subdivision. There is no difference, as I see it, between aging activist organizations or religious organization.

    The basic dilemma of a higher technological evolution is the surrender of personal moral choice for the sake of organized cooperation.

    Is what we are really talking about simply the end result of a societal development that has exhausted itself? Where collective morals are less useful than individual morals to survival as a group as presently constituted.

    The first and most obvious conclusion one can make about American society is that American Exceptionalism has spawned what amounts to insane personal moral choice. Moral choices tailored solely to the individual by the individual. Every person is right in his opinion merely by belief. Every person must never flip flop and pollute his personal true belief by surrender to another belief. Yet , across the board, this is exactly what happens when the person is inside the safety cocoon of the corporate organization in the general sense of the words Latin roots.

    I do not claim to know any answers but I sure do have questions and observations. One is conditioned by an all pervasive sublimation of personal choice to the corporate organization one temporarily depends on for survival of the moment. The system forces ” All Against All” assumptions to survive . This is true for the business organization or the state. Certainly, one is practically educated to personal survival while at the same time extolling collective survival issues.

    Are the ” good” as fraudulent as the “bad”?

    Try dealing with the moral surrender embodied by the captured civil servant. Even more so by the vigilant watchdog inventing any concoction to win his administrative law position in a state adversarial position. Look at the States Attorney that handles a state prosecution he/ she knows is way overkill.

    I see the whole problem as the burn out of our ideas of societal cooperation. MY life long favorite book is T E Lawrence’s ” Seven Pillars of Wisdom”. Last night , the events of the Arab Revolt centered on keeping the tribes from killing the revolt and turning on each other as they have done for millennia. Lawrence held his position as an idependent judge. In this series of events he had to adjudicate multiple blood feud’s, bewitchings, evil eyes, fights, insults and so forth. Yet, all the time these groups were associated the participants lobbied for personal benefit and simply intrigue. Friend looking for money from the Turks at the same time to betray that friend. The bulk of the participants understood this as normal tribal behaviour.

    If the internet comment is anywhere near an indicator of mood, the US simply is unable to bridge differences of dearly held beliefs not mich different, in principle if not type, than those adjudicated by Lawrence.

    We are composed of a lot of different tribes. At the same time , our collective endeavors force personal antipathy to each other while smiling through the PC just as the tribes of Arabia did for so long.

    It is fear and fear and fear. Fear engendered by impersonal complexity.

    Fix the corporation? Ok, you must fix every other corpus oriented gathering of humans too. But quite recently, the corpus of evil was the Imperial Presidency. What better reading on this end of the problem than Chalmers Johnson or Andrew Bacevitch. The corporations own the state high personages through the personal interactions of their own high personages .

    What we have across the board is an employee problem. Yet, these employees are looking after their own family and class survival. Is it still tribal behaviour simply obscured by modern mumbo jumbo?

    Comment by Jerry J — June 16, 2010 @ 8:42 PM | Reply

  4. […] white-collar crimes that are clearly larceny on a greater scale.  Note also this, and this, and this. Leave a […]

    Pingback by Somebody is Waking Up on the Legal Front « The Fourteenth Banker Blog — August 18, 2010 @ 7:56 AM | Reply

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