Recent
events have underscored how vital it is that Senior Management set clear
defined operational and reporting procedures.
In many
companies the Directors 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 targets
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
disasters 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! It is a truism that recessions catch what the auditors miss
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.
No comments:
Post a Comment