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Kweku Adoboli at UBS
By S. Wiley Wakeman, Celia Moore
The UBS case outlines how individual ambition and lax organisational standards and oversight can lead to consistent unethical behaviour resulting in a crippling loss at a large investment bank. Even though the industry had as recently as 2007 been subject to the ramifications of similar behaviour with Jerome Kerviel’s 4.9billion euros loss at Societe Generale, the UBS case highlights how quickly internal controls and ethical concerns can be overlooked. Intense external concerns, driven by a weakening economy, and institutional pressure, due to declining profits, forced internal controls and thorough explanations to be neglected in order to pursue profit. The case also highlights how weak corporate culture and unclear organisational structure can facilitate unethical behaviour. While individuals in Adoboli’s role would be expected to lose money on occasion, personal incentive, both from financial gain and organisational advancement, drove Adoboli to conceal his losses from the bank.
- Highlight how individual cognitive failings and weaknesses (social comparison, moral disengagement, framing effects) can combine with systemic organisational failures and weaknesses to lead to dangerous individual and organisational outcomes.
- Examine the balance between individual responsibility and corporate culpability.
- Demonstrate how prevalent practices (i.e. goal-setting) and culture in organisations can have unintended negative consequences.
- Show how weak corporate culture and lack of clear organisational structure can facilitate behaviour on the part of individuals that, when unchecked, is inimical to the corporate good.
|Publication Date:||January 2014|
|LBS Case Code:||CS-14-001|
|Subjects:||Business ethics, Corporate culture, Corporate governance, Fraud|