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Why football ‘ownership’ is a mess

December 28, 2013

Something is wrong with football. The problem is that it is very hard to explain exactly what is wrong. In the very first post on this blog I had a go, trying to point out some fundamental conflicts that exist between different groups who are central to the game – in particular ‘owners’ who want to run their clubs as businesses, and fans. Those conflicts have reemerged this season, in particular at Cardiff City where the current ‘owner’, Vincent Tan, finally pulled the plug on Malky Mackay’s popular and successful tenure as manager. Read more…

Bank Fines: Fail

December 20, 2013

I’ve been meaning to write something on this since I saw an article in the Guardian last week discussing the latest fine to hit US investment bank JP Morgan – a punitive $2bn settlement over accusations that some at the bank suspected, but did not report, suspicious activity by Ponzi-scheme fraudster Bernard Madoff. The most striking thing about the article, however, is not the details of this particular fine, but the final paragraph in which this latest punishment is set in the context of the rest of JP Morgan’s year:

‘If the fine comes before Christmas it will cap an annus horribilis for JP Morgan. Alongside the $13bn fine for its involvement in the subprime loan scandal, JP Morgan has:

  • ‘paid $4.5bn in November to settle allegations it has mis-sold mortgage bonds to pension funds and other institutional investors;
  • ‘paid $920m in September to settle US investigations into the “London Whale” trading scandal;
  • ‘in the same month, paid another $390m in refunds and $80m in settlement for billing credit card customers for identity theft protection they did not receive;
  • ‘paid $410m in penalties and repayments in July related to alleged manipulation of California and midwest electricity markets;’
  • I have gone on a bit in recent posts about the way that fining public corporations – particularly banks – penalises those with relatively little culpability (shareholders) at the expense of those who actually participate in corporate wrongdoing (CEOs, directors, and employees). The example of JP Morgan illustrates another implication of this failure. Not only will the punishments fail to deliver retribution for the wrong done, but they will fail to act as an effective deterrent so long as those who actually make the decisions are not called to account.

    What possible justification is there for continuing this wrong-headed approach to dealing with corporate wrongdoing? Is it simply based on the legal ideal (rather than practical reality) of corporate governance in which businesses are run by directors acting as agents for, and carrying out the wishes of, shareholders?

    Lloyds Bank Employees: Victims or Villains?

    December 12, 2013

    Another day, another record fine for a banking group. This time it is Lloyds Banking group being fined £28m for incentive schemes that led to the mis-selling of individual savings accounts and income protections products between 2010 and 2012. In some cases staff were offered bonuses of up to 35% of their monthly salaries, in others £1000 in cash. On the flip side, employees who failed to meet targets were threatened with demotion – the Financial Conduct Authority (FCA) highlights the case of the individual who sold to himself, his wife and a colleague to avoid this fate. Read more…

    New RBS Reports Raise Old Questions

    December 4, 2013

    Last week two new reports appeared on the Royal Bank of Scotland, this time focusing on its activity since the financial crisis. Both, in their own ways, raise new versions of concerns that have been around since the crisis and before – (1) that penalties imposed on banks target the wrong people; and (2) that banks are still failing in one of their primary responsibilities, the good management of risk.

    The more serious accusations appear in the Tomlinson Report compiled by the ‘Entrepreneur in Residence at the Department for Business, Innovation and Skills’. Tomlinson says that:

    ‘The experiences of many businesses across the country suggests that, at least within RBS, there are circumstances in which the banks are unnecessarily engineering a default to move the business out of local management and into their turnaround divisions, generating revenue through fees, increased margins and devalued assets.’ Read more…

    New Paper: “Corporations and Non-Agential Moral Responsibility”

    July 24, 2013

    My paper “Corporations and Non-Agential Moral Responsibility” has just been published online by the Journal of Applied Philosophy: http://onlinelibrary.wiley.com/doi/10.1111/japp.12029/abstract

    Abstract

    One of the core challenges presented by ascriptions of moral responsibility to corporations is to identify who or what is being held responsible. A significant source of controversy in attempts to answer this challenge is whether or not responsibility can fall on a ‘corporate entity’ distinct from the individuals that make it up. In this article I argue that both sides of this debate have incorrectly assumed that the possession of moral agency is a necessary condition for holding moral responsibility. I go on to argue that it is sufficient for a corporate entity to be a ‘morally significant system’, that is a non-agential system created by moral agents, and I develop an account of such systems. I conclude by setting out the implications of this analysis for our practices of holding corporations morally responsible.

    Can we be harmed after we die? Jimmy Savile vs. Lance Armstrong

    October 24, 2012

    In the last few weeks two news stories have been particularly prominent. The first concerns the revelations that erstwhile national treasure Jimmy Savile was actually a predatory paedophile who took advantage of his position as a prominent broadcaster and charity fundraiser to sexually abuse women and children, particularly the vulnerable.

    The second concerns cycling legend and seven times Tour de France winner Lance Armstrong, who has finally been exposed as orchestrating  “the most sophisticated, professionalized and successful doping program” in sport. Read more…

    The Purpose of Banks

    May 8, 2012

    I wrote this article with Antony Elliot, chief executive of the Fairbanking Foundation. It was published in the May edition of Financial World under the title ‘Business Angels’.

    In February, Stephen Hester received positive comment in the Financial Times for his memo to RBS staff setting out his expectations of the organisation: “To be purposeful, calm, and do our jobs to the best of our ability.” This idea of ‘purpose’ has arisen more than once in recent commentary on the financial services sector. Pursuit of a valuable purpose could be viewed as a way of addressing prominent criticisms of the sector, such as that of undertaking ‘socially useless’ activity. Read more…