Admin - Mahony Partners

Sep

2011

Firing the CEO, Part 4: Parsing the UBS statement

Financial Services, Taking & Managing Risk

Swiss banking giant UBS today announced the resignation of CEO Oswald Grubel after a marathon meeting of its board in Singapore. There was speculation all week that the scandal could ultimately cost Gruebel his job but the suddenness of his departure is a bit of a surprise. His exit marks the fourth CEO firing in the past two weeks, and the second in the banking industry. The statement by UBS, while more detailed than earlier commentaries, nonetheless leaves several questions unanswered. There is no complete explanation of how the trading losses occurred and who besides the jai... Read More

Sep

2011

Friday Risk Reading: Is Failure the Secret to Success?

Friday Risk Reading

This week’s recommended risk reading is a recent article from the New York Times Sunday magazine. Entitled “What if the Secret to Success is Failure?,” the article examines a new approach to building character among students, not simply strengthening their academic performance. It’s clearly hit a nerve, topping the most-emailed list on the Times website all week. At the center of the article are a handful of teachers and scholars who are taking the risk of ... Read More

Sep

2011

A one-hand clap for Jefferies

Financial Services, Taking & Managing Risk

Jefferies Group (NYSE: JEF) could have spared itself (and its shareholders) a lot of pain if it had better handled the news CEO Richard Handler’s stock sale. The news, reported as a result of a regulatory filing, sent shares of the investment bank tumbling more than 11% on Thursday. They recovered somewhat today, but investors remain shaken over the sale and the clumsy way it was handled. That’s a shame, because Jefferies did the hard part right. Usually, the CEO is tight-lipped about the reaso... Read More

Sep

2011

Communicating a CEO firing – Part 3

Taking & Managing Risk

Technology giant HP is demonstrating still another way to fire the CEO - by leaking your intentions to the media. The New York Times and other media outlets, citing anonymous sources "with knowledge of the board's actions," are reporting that the board is preparing to oust CEO Léo Apotheker, who has been in the post less than a year. No formal statement from an HP spokesperson has yet appeared. By contrast, other recent CEO dismissals - Carol Bartz of Yahoo and Robert Kelly at Bank of New York Mellon - were not telegraphed in advance by leak... Read More

Sep

2011

5 Lessons from Mariano Rivera

Taking & Managing Risk

Even if you’re not an ardent baseball fan, you have to be impressed with Mariano Rivera, the incomparable relief pitcher for the New York Yankees, who two days ago set the record for most saves, at 602. Sports writers long ago ran out of superlatives for describing Rivera’s talent and durability, and the crucial role he has played in the Yankees’ success over the past sixteen years. But what can Rivera’s remarkable career teach us, the mere mortals of the earth? I believe there are five lessons. 1. The nu... Read More

Sep

2011

UBS: Pressure mounts after trading loss

Financial Services, Taking & Managing Risk

Today’s press coverage of the continuing drama at UBS suggests the saga is playing out in predictable fashion, as rivals seek to poach UBS deal-makers, whose bonuses are likely to shrivel following the bank’s losses. And speculation is mounting that CEO Oswald Gruebel will have to step aside. The situation has been made worse by UBS’s reluctance to move aggressively, along the lines I recommended in a Read More

Sep

2011

Friday Risk Reading: Advice on financial risk management from 15 years ago

Financial Services, Friday Risk Reading, Taking & Managing Risk

In light of the startling $2 billion trading loss that UBS reported this week, my Friday Risk Reading selection is a speech from 1996 by New York Fed President William J. McDonough. As president of the New York Fed from 1993 to 2003, when he was succeeded by Tim Geithner, McDononugh spoke often about bank safety, financial innovation and the impact of technology on banking. In 1996, he addressed a conference on Latin American banking in Buenos Aires and outlined the basic elements of sound risk manageme... Read More

Sep

2011

Silence reigns at UBS after trading debacle

Financial Services, Taking & Managing Risk

UBS has remained oddly silent since its brief press release announcing a $2 billion loss from unauthorized trades in London. The announcement chopped some $5 billion from the bank’s market cap, and neither CEO Oswald Grübel nor any other senior executive has addressed the matter. It’s instructive to compare UBS’s public response to that of other banks involved in similar situations. When Jérôme Kerviel’s trades racked up losses of $7.2 billion for Société Générale, its CEO, Daniel Bouton, faced the cameras and the critics head-on. He appeared at a press co... Read More

Sep

2011

The 3 things UBS must do

Financial Services, Taking & Managing Risk

Today’s stunning announcement by UBS that a rogue trader lost $2 billion presents big communications challenges for the Swiss bank. It will need to be forthcoming with regulators about the reasons for the loss and the breakdown in the bank’s internal controls. It must reassure private clients that their assets are safe, keep valued employees from fleeing and address investor concerns about the scale of risk-taking in the investment bank – all while trying to rebuild its businesses during a very rocky time in the markets. Clearly UBS has to answer some very tough questions abo... Read More

Sep

2011

Still waiting for a really good 9/11 speech

Friday Risk Reading

It seems to me that the words of our political leaders have always fallen short against the tragedy of the September 11 terrorist attack. In the days immediately afterwards, elected leaders offered words of comfort and calls to unity, but they seemed dwarfed by the enormity of the horror, and none are remembered today. It was easier to invoke the words of others, either from scripture or from familiar leaders like Lincoln and Roosevelt, who rallied the nation in times of hardship and war. The speeches the tenth anniversary of the attack likewise fell short. Even the eloquence of Pr... Read More