Competence and Risk….. Pigeons coming home to roost!

Are your pigeons coming home to roost?

The news that the Irish government is to wind up Allied Irish Bank, and in doing must consider the markets reaction and the impact on the Irish economy and government (and of course people), is perhaps an extreme example of the proverbial pigeon coming home to roost.

This one is very tatty indeed having been battered by forays, into the debt boom. If Anglo Irish Bank’s exposure to Quinn Insurance is indicative of a lack of effective risk management and associated management competence, it will be interesting to see what is in the balance sheet at Allied Irish.

The bubble made making money appear easy as the market surged upwards, everyone was a Super Hero – and the risk was managed by wonderful IT systems. But there is no substitute for competence – not just technical risk, but management (governance) competence. The ability to understand what staff are doing, (however arcane or black box it may appear), and when it is appropriate to challenge it, and to do so effectively are key competencies that are developed not innate. Business is still about people.

From the outside we cannot know the motivations, and positive actions that led AIB to build up such a toxic balance sheet. We may however seek to ensure that our own Super Heroes do not fall into the same trap and become homing pigeons.

Talk to us, in confidence and without obligation about helping your managers develop the competence and confidence to manage effectively. Solutions that engage, motivate and fit around, rather than disrupt the business.

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