Cheques and balances?

Cheques and balances?

Executives at FROB Spain’s bank rescue fund are about to appoint PWC, Ernst & Young, Deloitte and KPMG to run a “health check” on its banking systems.

Recent events have underscored how vital it is that clearly defined operational and reporting procedures are in place.

In many organisations the Senior Management simply do not have the understanding of the mechanics or the day to day activities of the business which they purport to run.

For example I have worked in trading environments where totally unrealistic profit target have been passed from Board level to trading departments. No cognisance having been given to the disproportionate risks which need to be taken to achieve these targets.

Some of the most spectacular financial flame outs have followed a period of ostensibly highly successful trading. In their desire to recognise these “profits” no thought were given as to how they were being made. In such times it would be well to take note of the old adage that is something looks to be too good it usually is!

If your company is bucking the trend in these difficult times it may well be that you are implementing a winning formula.

However history tells us that it is sometimes a prudent course of action to look under a few stones – just in case.