Editor's letter.


Whenever a company hits the buffers, the first question is always one of responsibility. In Enron's case, the finger of blame is pointing far and wide and one of the Big Five could fall as a consequence. In Railtrack's case, it's fairly clear cut: the government says it's the management's fault and the management says it's the government's fault.

The reality, of course, is that few corporate disasters are caused by one person or even one department. Even the fall of Barings cannot be blamed entirely on Nick Leeson. Other managers, and a corporate culture that enabled the rogue trader to build up spectacular losses, were also responsible for breaking the bank. But again and again we learn that the right checks and balances could have saved the day. Turning a blind eye may make things easier in the short term--no messy meetings, no risk of losing a major client--but in the long term it makes the people who ignore the situation as guilty as the culprit.

In Railtrack's case, the problem was a misreading of the real state of the network at the point of privatisation. Steve Marshall FCMA, the former chief executive of the company and current chief executive of Railtrack Group plc, representing shareholders' interests, admits that the management team was slow to grasp how much work was really necessary (page 24). As any good sales manager knows, building expectations and failing to meet them erodes respect, confidence and trust. Railtrack promised a great deal and couldn't deliver, despite heavy investment, because it had underestimated the task (page 20). It is now left to Richard Bowker FCMA, chairman of...

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