Purpose - To evaluate the extent to which hubristic behaviour on the part of Thomas Farrow contributed to the downfall of Farrow’s Bank in 1920. Design/methodology/approach - The article traces the way in which Thomas Farrow’s... more
Purpose - To evaluate the extent to which hubristic behaviour on the part of Thomas Farrow contributed to the downfall of Farrow’s Bank in 1920.
Design/methodology/approach - The article traces the way in which Thomas Farrow’s behaviour changed over the course of his managerial career using primary sources obtained from various British archives, including: court records, witness statements, auditors’ reports, newspapers, journals, and personal letters. The article then evaluates Farrow’s actions in relation to the criteria outlined in Petit and Bollaert’s (2012) ‘Framework for Diagnosing CEO Hubris’ so as to assess how far he can be said to have become afflicted by managerial hubris.
Findings - All the collected evidence points to the conclusion that Thomas Farrow had, by the time of the Bank’s collapse in 1920, become afflicted by managerial hubris. This was reflected most clearly in the fact that he increasingly came to view himself as being somehow above and beyond the laws of the wider community. As a result, he felt little compunction about fraudulently writing-up the Bank’s assets so as to cover the huge losses that his reckless investments had produced.
Practical implications - The Farrow’s Bank episode confirms that the probability of management hubris materialising is enhanced when external control mechanisms are either lacking or inefficiently applied. On top of this, the amateurish organizational set-up of the Bank also suggests that the likelihood of hubris syndrome developing is enhanced when organisations themselves grant too much discretion to their leaders.
Originality/value - The paper breaks new ground by applying the latest management and psychology theories on the subject of leadership hubris to the field of financial management. Its value lies in the fact that it provides scholars and practitioners with an in-depth insight into how hubris syndrome can develop in organizational settings.
Nigeria has paid dearly for ethical lapses and competency deficiencies in public and private life. Fraud is systemic in Nigeria with the ordinary citizen being compelled to be either a liar, a cheat or an outright thief. Fraud has... more
Nigeria has paid dearly for ethical lapses and competency deficiencies in public and private life. Fraud is systemic in Nigeria with the ordinary citizen being compelled to be either a liar, a cheat or an outright thief. Fraud has stultified growth and national development, subverted the nation’s values and norms, generated a culture of illegality and impunity in public service, and frittered away the promise of the nation’s future. Today, the nation faces the trauma of a State whose date with destiny has been put on hold, for reasons that are completely self made, and completely avoidable. Any remedial measure that does not address core and ingrained character defects in leaders and followers, will not attract great success. What is needed is a strong accountability framework, an integrity system that is efficient in design and effective in operation, and a new generation of leaders. The choice before the nation is simple: Bend or Break... Value recreation is a must. We may be disappointed if we fail; but we are doomed if we do not try.
Keywords: Fraud, Corruption, White-Collar Crimes. I.
