Business Web Sites
Daily BulletinHoliday Centre

The Conversation

  • Written by The Conversation
imageDouble act. Jain and Fitschen at a Deutsche press conference.Frederik von Erichsen/EPA

The resignations of the co-CEOs of Deutsche Bank are a useful example for managers everywhere from an industry which has suffered its share of public outrage.

Anshu Jain is stepping down at the end of this month and Juergen Fitschen will leave next May. Their resignations follow criticism by shareholders, trade unions and employees, as well as tumbling share prices following a dip in performance (it must have been galling for them to watch the shares rise 4% after the announcement). A strategy unveiled in May in a bid to turn around the bank’s fortunes faced a rough reception from markets.

You could view the resignations from Deutsche Bank’s senior team as a public and institutional apology by the two CEOs and the bank. This is a welcome move and one which marks the start of a journey on the part of the bank to seek to restore the trust of its customers, the regulators, its employees and the general public.

In common with many of its peers, Deutsche has suffered its fair share of knocks. The bank has shelled out $2.5bn to US and UK authorities to settle allegations that it manipulated the Libor benchmark rate. There have been accusations of money laundering within the Russian unit, which the bank is reported to be investigating, and Fitschen is on trial over evidence he gave regarding the collapse of the Kirch media empire in 2002. He denies any wrongdoing.

Trust up

People judge the trustworthiness of both institutions and individuals on the basis of whether they can do their job, whether they care about others in the company or community or are entirely self-serving, and whether they display a basic integrity in all their dealings.

Therefore the decision of these joint CEOs is an important action for a number of reasons. Our research shows no one takes institutional protestations of trustworthiness seriously unless leaders are held to account.

imageBosses are under scrutiny from their employees.Josh Koonce, CC BY-NC-ND

The research has found that one of the things that really annoyed other employees was the failure of apparently powerful people (such as non-executive directors) to either take action against wrongdoers within their organisation or to take responsibility when things go wrong. Why bother to be trustworthy at middle or lower levels of an organisation when immoral or incompetent behaviour receives no institutional sanction higher up?

We also found that accepting responsibility for the consequences of one’s actions matters. There is a certain integrity in putting one’s hands up and admitting that, as a well-paid individual, you got it wrong. Even if you are competent, however clever and able you might be, also doing the right thing for the right reasons, having integrity, still counts. Apologies help to restore trust. Failing to take responsibility for one’s failures does not.

imageReputational risk.Condor.com, CC BY-NC-ND

Contrast the Deutsche Bank executives' actions with the travel company Thomas Cook where management has faced serious criticisms over the handling of the tragic deaths of two young children on one of their holidays in 2006.

Shouldering the cost

Perhaps in the Deutsche Bank story we are starting to see the green shoots of individual social responsibility. Corporate social responsibility costs senior executives nothing at a personal level. In contrast, taking individual social responsibility by exiting the company starts to communicate to the world that individual executives, however powerful, can be held to account by others in society.

It really is about time leaders in these banks took public responsibility for their own actions and decisions. Their successors need to take to heart the fact that people will only trust them if they continually demonstrate their ability to do the job, their benevolence towards others and their integrity in decision making on a day-to-day basis.

We need these three characteristics of leadership to once again be truly accepted as essential for any who aspire to be senior directors within financial services. Only then will we see behavioural change in the banks. Hopefully through that change a new generation of leaders will emerge who at a personal level get back to the idea of banking as a responsible business activity which contributes to the economic development of nation states, not just a means of amassing personal wealth. And only then will we see public confidence in the banks fully restored.

Veronica Hope Hailey is the author of three public reports on trust: Where has all the trust gone? (2012); Cultivating Trustworthy Leadership (2014); Experiencing Trustworthy Leadership (2014). The research was funded by the CIPD and HEIF.

Authors: The Conversation

Read more http://theconversation.com/deutsche-does-the-decent-thing-as-joint-ceos-take-it-on-the-chin-43213


The Conversation

Politics

Prime Minister - Step up in drought budget support

Drought-hit farmers, small businesses and rural towns are set for an immediate cash injection to keep stock fed and watered, keep businesses open, keep locals in work and pump funds into local eco...

Scott Morrison - avatar Scott Morrison

David Littleproud MP interview with Tom Connell

Interview with Tom Connell – Sky News NewsDay   The Coalition’s latest drought support package   TOM CONNELL: David Littleproud, thanks for your time. We've got this drought package going throug...

Tom Connell - avatar Tom Connell

Prime Minister Address Tom Hughes Oration Dinner

Thank you very much, Julian, for that very kind introduction.  It was very generous. Thank you very much for those words.  It's great to be here with you.  I'm here today to give the vote of thank...

Scott Morrison - avatar Scott Morrison

Business News

Acciona And Surfing Australia Partnership

Acciona Ambassador and 2020 World Surf League (WSL) Women’s World Tour rookie Isabella Nichols with Bede Noonan, Managing Director of Acciona Geotech at today's launch. CASUARINA/NSW (N...

Blainey Woodham - avatar Blainey Woodham

What is identity verification and why your business should start using it

As time goes by, new technologies and practices always find a way into the world of business. The ones that prove valuable are first adopted by the forward-thinking businesses until they finally b...

Diana Smith - avatar Diana Smith

How to protect your business with the help of National Police Check

Hiring for organizations is not an easy task. Every recruiter wants to employ reliable, honest, skilled people who are a good fit for their office culture. In short, hiring someone who will help the...

KONCHECK - avatar KONCHECK

Travel

Style in Summer: A Guide to Visiting Melbourne, Australia This Holiday Season

Summer is one of the most exciting months in the city of Melbourne, with dozens of activities sprouting up all over the place and endless activities for everyone to engage in. If you are someone w...

News Company - avatar News Company

Once in a lifetime things to do in Beijing

The capital of China is an absolutely incredible city where there is lots of see and do. Let's take a look at some truly once in a lifetime things that you can experience in the location. 1 - Cli...

News Company - avatar News Company

Enjoy a short break in Perth this summer

With summer just around the corner, now is the perfect time to book a short break in Perth, a city fast becoming a hub for the arts, shopping and culinary delights as well as the unique natural scen...

Sarah Peattie - avatar Sarah Peattie

ShowPo