About Me

This blog carries a series of posts and articles, mostly written by Anthony Fitzsimmons under the aegis of Reputability LLP, a business that is no longer trading as such. Anthony is a thought leader in reputational risk and its root causes, behavioural, organisational and leadership risk. His book 'Rethinking Reputational Risk' was widely acclaimed. Led by Anthony, Reputability helped business leaders to find, understand and deal with these widespread but hidden risks that regularly cause reputational disasters. You can contact Anthony via anthony.fitzsimmons At cranfield dot ac dot uk

Sunday, 15 July 2012

Whale harpoons JP Morgan

Six billion dollars lost.... Why?

It all began, in April 2013, 2013, with JP Morgan's ebullient CEO Jamie Dimon dismissing the stories that hedge funds had reason to bet against JPM's 'London Whale' as a “tempest in a teapot.”  There can't be any doubt he believed what he said.

By 11 May, Dimon was calling a press conference to explain a $2 billion trading loss.  Again no doubt he believed it.

Two months later, its been announced that the losses are nearly $6 billion.  He must be hoping it is true.

Something is clearly preventing Dimon and his board from knowing what is really going on within the business.

As Justin King said, you can't make good decisions without good information.  Garbage information usually means garbage decisions however talented the board and management.

So here are some $64 billion questions for the Board.
  • How much more of the information getting to JPM's board is garbage?  
  • Which bits might be unreliable?
  • How much information might be missing - and in what areas?
  • How can we reliably find out?
  • What might be causing us to have an information problem? 
  • And while we are about it, do we fully understand everything that is going on at JPM? 
No-one should think this is just a JP Morgan problem.  'Roads to Ruin' demonstrates how defective information flows can bring down empires - it's a frequent cause of corporate disasters.  All boards should be asking themselves questions like these.

Anthony Fitzsimmons

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