Leadership is Part of Any Successful Infrastructure

This past week there has been a great deal in the news about the plans to overhaul the financial regulatory system. Certainly the events of the past year punctuated by the anniversary of the Lehman collapse show that there is ample room for improvement in the financial regulatory system.

The thing I found missing from the various speeches and news reports was the subject of leadership. It has long been my belief that the economic collapse was more a leadership problem than a regulatory one. In saying that I don't want to minimize the pressure that leaders experience in the operation of the financial firms and the regulatory system. However something kept these leaders from standing up and calling a halt to the crazed practices that somehow became the norm.

As a former banker my simple but (now appears correct) belief was that the only way to make more money in banking (a mature industry) is to take more risk. That risk has many forms that no regulation or regulator could adequately reign in. All the more reason that organizational leaders (not just banking leaders) need to demonstrate the strength of character necessary bridle averice.

So, it seems only logical that part of the reform we should advocate includes character and leadership development that will equip leaders to "regulate" their own organizations. It will not be possible to provide a system of regulation that will overcome weakness in leadership because at their heart the challenges we face are not economic, environmental, social or legal; they are challenges of character and leadership.