Over a long career in financial services as well as a parallel public one as a writer/editor/speaker I have often differed both privately and publicly with the views of 'leaders' of the financial services business, particularly the life insurance part.
In my view there has been and remains too little basis on which to defer to the judgement and views of senior people in financial services. However, had I entertained any doubts on this score in spite of my own experience with and observation of such 'leaders', those doubts would have evaporated in recent years as I watched the results of so-called expert senior management at work in financial services.
There is no need to rehearse here an exemplary list of the greed and incompetence demonstrated by many of those to be found among U.S. financial services leadership (plus some examples from Canada -- notwithstanding the post-meltdown credit claimed by Canadian bankers and their media cheerleaders for a degree of financial probity actually dictated and enforced by Ottawa's federal regulators). What occurred right in front of the market fundamentalists' icon, before which so many in financial services bowed, was financial services 'leadership' generating the evaporation of trillions of dollars of equity followed by further trillions of dollars in costs by various governments and agencies in the form of bailouts, subsidies and incentives -- including some in Canada.
The idea, one that was so beloved by market fundamentalist groupies in business, that markets will correct their own excesses now seems not only quaint but hopelessly silly. Except of course to logorrheic commentators in places like Fox News.
I have known -- and known of, based on reliable sources -- more than a few company CEOs as well as platoons of senior executives in various companies.
The 2008-2009 financial services meltdown did not surprise me as much as it might otherwise have done because I have not observed anything approaching consistent brilliance within this group: a number were very bright indeed; several had IQs only somewhat above room temperature although (commonly) their political skills were highly developed; a few -- including some able ones -- were thorough-going boors and bullies. Adherence to principle was far from universal.
New York Times columnist Thomas Friedman, considering the leadership of financial institutions in terms of the American financial meltdown, concluded [NYT, Nov.26,2008] that "some of our country's best-paid bankers were overrated dopes who had no idea what they were selling, or greedy cynics who did know and turned a blind eye. But it wasn't only the bankers."
Indeed it was not.
The performance of North American life insurance company senior management teams over the past few decades covers a spectrum ranging from the superior to the merely custodial and all the way over to stupidly reckless and self-aggrandizing with the majority somewhere in the middle. More costly corporate mistakes have been quietly buried than the financial services paparazzi (i.e., the financial media, the analysts and the rating agencies) have ever come close to realizing.
In the wake of the financial services meltdown it is clear that while some key executives have played unique and beneficial roles many others were directly and indirectly responsible for disastrous corporate results for which nonetheless they were too often paid obscenely large amounts of money. The reality seemed to be: the higher the level of incompetence and greed, and the bigger the financial losses to the company, then the greater the variable compensation paid to senior management.
One of my firmly held views, one related to any number of mistakes and miscalculations by senior North American financial services executives is this:
one should be very suspicious of claimed 'vision' and superior expertise by members of senior management, especially if that claim comes down to a reality supported by little more than corporate rank coupled with self-promoting publicity directed to an often receptive audience -- the financial services paparazzi.