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February 13, 2013

Waking up to ethics: horsemeat and derivatives

Most of my mornings start with ethics. Not in the office, but from my waking moment as practically every day the radio news is filled with some ethical malpractice in business, somewhere in the world.

I must apologise to more sensitive readers, but I have to confess to my amusement, in a Pythonesque way, to hear linked references whilst half asleep, to: "Spaghetti Bolognaise", "Criminal gangs", "Frozen Burgers" and "Interpol". These phrases of course referring to the current crisis de jour. Minced horsemeat. A little too, film director, Quentin Tarantino for so early in the day.

Putting aside the ethical question of which meat is murder (as some protestors dressed up as pantomime horses in Tesco’s shopping aisles seem to be asking)? Or is all meat murder? The issue under the spotlight is back on public trust. What are we eating? Where is it from? When is a cow a horse?

With supply chains as complex as tangled spaghetti, it did appear to me, that no one seems to know. I couldn’t quite understand why a product that is supposedly advertised made from Irish beef, was sourced from France, (legitimately) which in turn came from the secret place that no one seems to know where – where the meat product of dubious origins originates from. European Ministers are meeting in crisis talks. I wondered what they’d eat.

Seems there’ll be a lot of work for risk managers in the supply chain now. From non-beef to banks, my next story from beneath the duvet, was on Barclays new path to integrity. Chief executive Anthony Jenkins admitted ‘It will take years before people actually change their impression of us." Putting PPI, Libor and swaps in the history drawer is a bit of a squash. He bravely added ‘I am not daunted by that at all’ and sees it as a long-term return, convinced there is no need for a trade off between "doing the right thing for the customer" and "returns for the shareholder."

Let’s encourage Barclays on its path so others may follow. This was the discussion by studio guests as I headed for work. It’s time for us all to take bankers off pedestals. If some leave the bank who are not the right "fit", I for one am sure there are plenty of other bright, strong, ethical candidates who are both commercially astute AND risk aware. After all as one radio guest, Julie Mayer, commented ‘If life were a video game, being a white male banker would be the lowest level of difficulty.’

Which made me reflect on the similarities of both the 2007 financial crisis and the current horsemeat crisis. Nobody really knew what was in those bundles of debt, created by overpaid, exalted masters of the universe. Where it all came from. Or how much there was. Or, scarily how much toxic debt is still spread in the market. (Can you imagine a quadrillion?)

Maybe it is time to change my radio dial to start my day. And grow my own vegetables.

Tanya’s previous blog post

Costs of hiding the numbers – what price would you pay?

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