Abstract

http://ssrn.com/abstract=1692060
 
 

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What Governance Lessons Should be Learnt from the Société Générale's Kerviel Affair?


Eric Pichet


KEDGE Business School

October 14, 2010

La Revue Française de Gouvernance d'Entreprise, Vol. 3, pp. 117-138, September 1, 2008

Abstract:     
Belying its reputation as a pioneer in derivative product management and market risk control, the French banking institution Société Générale (SG) suffered in January 2008 the largest ever trading loss in financial market history. The origins of this loss and the way in which the bank managed the situation via its President Daniel Bouton and Board of Directors is highly instructive at several levels. This text will try to draw lessons to improve governance of large listed international banks. Such lessons, both positive and negative, can be divided into three categories: communications with regulators, markets and shareholders; the structure of internal control bodies and Board reports; and the organisation and composition of the Board itself, notably in regards to the role of a Crisis Management Committee, which would benefit from the defined of a specific status and the identification of more clearly identified borders within the Board of Directors.

Number of Pages in PDF File: 22

Keywords: Governance, Board of Directors, Crisis Management Committee, Banks, Stock Markets

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Date posted: October 17, 2010 ; Last revised: October 23, 2010

Suggested Citation

Pichet, Eric, What Governance Lessons Should be Learnt from the Société Générale's Kerviel Affair? (October 14, 2010). La Revue Française de Gouvernance d'Entreprise, Vol. 3, pp. 117-138, September 1, 2008 . Available at SSRN: http://ssrn.com/abstract=1692060

Contact Information

Eric Pichet (Contact Author)
KEDGE Business School ( email )
Domaine de Luminy - BP 921
BP 921
Marseille, PACA 13288
France
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