Why Some Firms Thrive While Others Fail: Governance, Management, and the Financial Crisis

Hardcover: 296 pages
Publisher: Oxford University Press, USA (July 5, 2012)
Language: English
ISBN-10: 0199915997
ISBN-13: 978-0199915996

The financial crisis revealed fundamental shortcomings in both public and private American institutions. While the firms that were successful each found their own way to weather the crisis, unsuccessful firms were remarkably alike in their inability to cope and in the mistakes they made.

Combing through the wreckage, Thomas H. Stanton examines which financial firms survived the crisis and which ones failed. He analyzes how differences in governance, organization, and management between these firms led to their success or failure, and how government supervision and regulation failed to prevent the crisis. Based on interviews that the Financial Crisis Inquiry Commission conducted with CEOs, risk officers, traders, and others at major financial firms, Stanton systematically outlines how successful firms, like JP Morgan Chase, Goldman Sachs, Wells Fargo, and others used a multitude of approaches to distinguish themselves in operational competence and intelligent discipline, while unsuccessful firms, like Fannie Mae, Freddie Mac, and Countrywide, and others uniformly failed to prepare for possible low-probability, high-impact events. Stanton concludes by issuing a call for strengthening organizational design, governance, and risk management, by identifying clear attributes that distinguish successful firms from the others.

Why Some Firms Thrive While Others Fail is an invaluable resource for company officials and policymakers on the development of a risk-sensitive, more-successful culture. It also provides an essential foundation on culture and governance for students of business and public policy, practitioners within the public organizations and private financial institutions at the center of the recent financial crisis, and those at risk of playing roles in possible future crises.

“Tom Stanton’s book should be high-priority reading for senior managers and policymakers.  Careful consideration of the well-reasoned arguments in this book will necessarily be part of any serious effort to reform our financial regulatory system, strengthen firm governance and risk management, and promote greater overall financial stability—all critical prerequisites to assuring a strong and resilient economy, and rising standards of living, over time.”—Richard Spillenkothen, former director of Banking Supervision and Regulation, Board of Governors of the Federal Reserve System

Oxford University Press has now published the book in Chinese: 企业生死之谜：经济危机的治理与管理教训