CEOs And Company Directors – The Good, The Bad And The Downright Greedy
Shocked, appalled, stunned, enraged, speechless. Just some of the emotions I have experienced over the last couple of months as bank upon bank fell over around the world and whole countries begin to face the repercussions of a global financial company rating Singapore melt-down.
I have always believed that crisis brings out the best or the worst in all of us. CEOs and company directors are no different. It is easy to be a leader in the good times, the true test of character of a leader is how they cope with the bad times. And to date, not many of them have impressed.
Because of the greed-is-good cult we now seem to be part of, in NZ this year we watched numerous finance companies fall over causing huge distress to their investors. Fortunately even as things worsened, confidence in our banks was and still is, pretty solid. We may have looked on the rest of the world with envy over the past few years as other countries seemed to be leaping ahead in the financial stakes; but the conservative stance of our banks has paid off. And I’m sure every New Zealander is now grateful for that.
The first CEO in NZ to leave me speechless was a man called Rod Petrecevic, executive director of a finance company (Bridgecorp). He now faces numerous criminal charges. Bridgecorp collapsed owing 14,000 debenture holders NZ$459million, yet during 2008, even though it was obvious the company was in serious trouble, he continued to draw his obscene salary; continued to take investor money; stashed all his very expensive toys into a trust fund. After the collapse he had the sheer audacity to go to court to get performance bonuses he believed he was owed!
One of our long term business heroes – Eric Watson and his business partner Mark Hotchin set up the finance company Hanover and fronted it with a famous, and trusted, TV presenter. They encouraged Mums and Dads to invest their hard earned savings and amassed an incredible NZ$1 billion. Meanwhile they had set up a shadow company and were using these funds to invest in risky investments of their own. Tragically for all concerned, the cards have come crashing down. No doubt these smart cookies will have stashed plenty in off-shore accounts so will be OK – but tough luck on the poor old (and most of them were old) investors.