Madazine : Guarding the Guards
Guarding The Guards
The recent spate of financial scandals emanating from some of the world’s largest companies has led to much concern as to what is to be done to assure investors that their money is not being frittered away by the deviousness of business leaders. This pressing matter was referred to that doughtiest of investigators, Sir Bertram Utterside, former professor of social studies at one of Britain’s top universities and recently described as ‘The Fearsome Ferret’. Probably few would doubt that Sir Bertram’s advice on major topical issues has become almost indispensable. Happily, he was available to handle yet another hot potato. His comments are given below:
Though not of major importance, this question of how to deal with errant business leaders deserves some attention, concerning as it does the wellbeing of many people. Once more I am asked to address a supposed problem, the solution of which is, as they say, a walk in the park – literally so on this occasion.
In approaching the matter, I found myself indebted to the humorist George Ade, who referred to ‘a people so primitive that they did not know how to get money except by working for it’. One could hardly put it better. What are stock markets but casinos, with opportunists putting their snouts into the troughs, all wanting to make fortunes without doing a stroke of real work? Why? I suggest that they do this because certain city analysts, themselves strangers to genuine effort, demand ever-more sparkling results from what is usually mundane activity. Small wonder that those who actually work often look askance at share-price movements.
In one of my earlier commissions, I referred to the work of Karl Marx and I now draw upon him again, in that I believe he regarded capitalism as a step towards a truly socialist society. I endorse that view. ‘From each as he is able, to each as he requires’ is an attitude that will finally prevail. My apologies if this offends any feminist readers, but I am merely quoting. Anyway, the point is what are we to do about corporate misdeeds?
They say there is nothing new under the Sun and here again, past commentators on the social scenes of their times had much to say. I am mindful of a snippet I once saw in a book preface, to the effect that good is an enduring, unchanging force, while evil continually manifests itself in varying forms. I believe Zarathustra touched upon this two and a half millennia ago. The robber barons of yesterwhen are still with us, in different guises. An associated thought is that expressed by Juvenal, when he posed the question of who should police the police.
There was a time when one could read a company’s accounts, confident that the figures presented an accurate picture of the business concerned. I suggest that we get back to that position by rating auditors in the same way as we now assess those in other fields, such as sport. Many business houses yearn for a good credit rating from a top source. Why not extend this to the book-checkers? One could envisage a situation in which these firms were ranked according to their soundness. A sign-off from an auditor with a triple A rating would be the best available to a company, indicating that everything was tickety-boo. An endorsement from, say, a single A bean-counter might suggest something slightly iffy in the official record, while one from an unrated source would indicate that the accounts were not worth the paper they were printed on.
This raises the question of who would vet the rating agencies, who were supervising the auditors, who were monitoring the companies. These receding shades of overseeing resemble fractal geometry, bringing good old Mandelbrot to mind. I suggest that the final arbiter should be a disinterested member of the academic community. Far be it from me to offer any indication as to who might accept so onerous a duty. I have no more to say.
Further pronouncements from Sir Bertram coming soon.
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