Interesting thoughts on oversight and governance

Blogger: Eric Maiwald

This morning at Catalyst Nick Leeson, of Barings Bank fame, spoke as part of the GRC track. It was interesting to learn what happened back in 1995 as Barings Bank failed. While Nick’s story was interesting, I think there are insights that we can pull out of what he said:

• Technology might be useful in bringing risky activities to the attention of managers but the managers must understand what they are looking at and why the activity is risky
• People who perform oversight activities must understand the activity they are monitoring – in this case, Nick Leeson became his own overseer as his managers didn’t understand what he was doing

In the end, Nick Leeson’s activities led to the failure of the bank and a visit to jail in Singapore. Would proper oversight have prevented this? Well, according to Nick, the signs of imminent danger existed if anyone had bothered to look.