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Lessons from Bearing Case

In: Business and Management

Submitted By jasmine1221
Words 1026
Pages 5
Significant case, most leading case in lack of corporate governance * Holding royal’s bank account (not merely responsibility toward the stakeholder but the society) * Oldest merchant bank * A single handed activity by Nick Leeson caused the bank bankrupted

Although Leeson is the one responsible for Barings’s bankrupt, however it’s not possible if other parties in the bank do their duties.
Leeson only took advantage since others in the organisation not carrying out their tasks and lack of knowledge.
Leeson used this to boost his ego.
If each of the people in organisation do their jobs without compromising or lacking in somewhere, Leeson wont have chance to take advantage.

Corporate Player
Staff
Internal monitor, internal auditor
Gatekeepers like external auditor
External bodies
Shareholders

How each of these people compromised their duties?

Leaders: * Lack of knowledge, they did not know anything about the activities * They didn’t not change the management for the new business * Blindly depend on external people without proper test * Profit gained shared among management as bonuses, lead to further greed, monetary benefits * Hire Leeson who is only a bookkeeper * Employee incompetent people for the job * No monitoring, lessen is left independent to handle the stock market * No proper check when he asked for money, no due diligence test was done *
Internal auditor

External auditor * Blindly follow the document given by Barings Bank, without checking

Security exchange commission * They failed to conduct investigation * Receive alert but negligence of external goalkeeper

Although is a one-man-show, everyone has compromised their duties

Q1

* Lack of Internal Control * Lack of supervision * Lack of proper communication * Lack of...

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