Hidden in Plain Sight-An analysis of the influence of strategic leadership characteristics and styles of the Chair, Chair/CEO, CEO and CFO in banking failure, recapitalisation or bailout (1999-2017). A grounded theory approach

Abstract

The global financial crisis (2007-2009) caused the most severe global economic downturn since the Great Depression and in the 10 years since, the global banking sector has witnessed an onslaught of banking scandals such as: LIBOR, FOREX, money laundering, and tax avoidance. In the wake of these ongoing issues, there is a clear need to explore alternative methods to tackle failures and scandals in the banking sector. A key weakness in the current discourse is the lack of analysis of the leadership characteristics and styles of board members of leading banks. This study responds to this weakness, contributing in three principle ways. Firstly, by extending the use of grounded theory, it investigates the leadership characteristics and styles of the Chair, Chair/CEO, CEO and CFO in the 30 largest banks by market capitalisation with autonomous boards (taken from the Banker Top 1000 banks 2017), and those of the 17 largest banks by market capitalisation that failed, needed recapitalisation or bailout (1999 – 2017) and presents a substantive theory of ‘Strategic Leadership Influence in Banking’. Secondly, it adds to the strategic leadership debate finding successful leaders exhibit characteristics and traits of more than one leadership style. Thirdly, the research adds to the conversation on shared leadership by analysing the relationship between the Chair, Chair/CEO, CEO and CFO, which is found to be an influencing factor in banking failure, recapitalisation or bailout. In highlighting the influence of leadership characteristics and styles in banking failure, the research also provides a useful risk analysis tool for policy makers and regulators as they attempt to avoid future banking collapses.