Those Frontline Employees at Chase and MF Global

The very best information about what’s happening in any organization rests with the employees on the frontline.  If you want to zero in on accounting fraud, pay a visit to the loading dock.  If the employees have a 32-day month that they use for shipping records, well, you have an accounting problem.  And if you want to know if a company used customer money for hedging, go to the back-office employees at MF Global.  Investigators finally did, and lo and behold, they found what they needed.  In the week before MF Global’s bankruptcy, those back-office employees were raising red flags to try and stop the misuse of customer funds.  Their warnings went
unheeded because, well, Jon Corzine was like a financial god who was not to be challenged. No CEO is above the expressed concerns of employees who have to do the physical transfers of funds.

And then there is Chase. The two traders involved in the $2-$3-billion loss the bank faces (in addition to the $30-billion-plus loss in share value) had some peculiar habits that did not go unnoticed by their fellow employees.  Any time one of your fellow co-workers is wearing the same clothes at work for days, you might want to ask a few
questions about why he isn’t going home.

The classic “never leaves on vacation” was writ large at Chase by the London traders. One, Bruno Michel Iksil, was not forthcoming with his supervisors about the details of his positions. Another, Achilles Machris, had a history of being difficult.  Sometimes those HR problems have their roots in other issues, such as a rogue trading philosophy for which they were being rewarded but about which they were not forthcoming.  Hence, the hostility as fellow employees wondered, “How are they getting away with this?” The names “Voldemort” and “London Whale” were not spun out of whole cloth. And the employees saw Jamie Dimon as the savviest risk manager on the Street.  No one is invincible, except maybe the frontline.

Trust the frontline. Listen to the frontline. Recognize the wisdom of the frontline when they speak up – they know whereof they speak. And most of them change their clothes each day.

About mmjdiary

Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD. The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards. Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio. She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News. In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles. Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
This entry was posted in News and Events. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.