Pat Dixon shares this frightening story about investment bankers who don’t understand the very products they construct and bring to market. It’s definitely an amusing story but after the laughter subsides, realization sets in that people like this exist in the world and can construct such unnecessary and senseless complex investment tools, which can bring tremendous risk to the marketplace.
Which is why we have things like Sarbanes-Oxley. But if your energy is focused on making sure you are legally compliant, you’re already behind the eight-ball. Legislation – like SOX, or carbon emissions, or even seatbelt laws – are typically re-active to market events, not preventative. If you want to ensure your business is going to be legally compliant in the future, focus on the ethical implications of your business in social and environmental contexts. If you behave with moral and ethical integrity, you’re not likely to have to worry about legal compliance.