Author Argues that Failure in Leadership and Corporate Governance is the Main Reason Why Banks Fail

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Internationally recognized expert in corporate governance John Zinkin’s new book, ‘Rebuilding Trust in Bank’, offers Directors of banks advice and suggestions for restoring customer’s trust level once again at the industry, organizational and individual levels

Singapore, February 18, 2014 - (PressReleasePoint) - According to Ernst & Young’s 2012 Global Consumer Banking survey, there is a net decrease in confidence level towards the banking industry, with an overall 40% of customers losing trust in the industry over the past year and only 22% gaining confidence. Nevertheless, its Global Banking Outlook 2013-14 summarizes that banks are still struggling to adapt their business models to the new policies and changing expectations of its customers and shareholders.

Author and internationally recognized expert in corporate governance John Zinkin attempts to make a strong case that the global banking crisis was due primarily to a failure in leadership and corporate governance. In his new book, Rebuilding Trust in Banks: The Role of Leadership and Governance (Wiley, 2013), he explains why, without effective corporate governance to balance out the zeal and ambition of effective leaders, sustainable long-term value cannot be created.

Leadership and governance cannot, and must not, be treated separately, because without governance there is nothing to prevent great leaders from becoming great bad leaders,” Zinkin said.

To illustrate this point, Zinkin explores the stories of four “imperial CEOs” who personify the crisis of leadership that is currently plaguing the banking industry. They include Merrill Lynch’s CEO, Stan O’Neal; Jimmy Cayne of Bear Stearns; Richard S. Fuld of Lehman Brothers; and Royal Bank of Scotland’s Fred Goodwin. He examines how these apparently successful, transformational leaders had ended up destroying the organizations they have helped take to the next level.

Drawing parallels between military general and political leader Napolean Bonaparte’s career to those of the four very successful bankers who also ended up as failures, Zinkin extracts powerful lessons about the major precipitating causes of failures in leadership and the paramount importance of good corporate governance. He then provides useful benchmarks and best practices, from a global perspective, for ensuring good corporate governance and responsible leadership in banking and finance.

The book is also supplemented with a series of checklists that board of directors can use for ensuring their management is on the right track. Directors of banks, financial professionals, journalists, academics and anyone who are passionate about creating sustainable business value in the financial services industry will gain an in-depth understanding of the “performance aspects” of corporate governance.

In the book’s praise, Didier Cossin, Director of the IMD Global Board Center and Professor of Finance and Governance at IMD Business School said, “Many bankers can profit from the reflection, tools and checklists proposed to assess their own or other’s institution. This should be a must-read for the senior manager of any significant financial institution around the world.”  

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