Of the world’s top financial institutions none has done more than Citigroup under Chuck Prince’s leadership to address ethical problems and attempt to instil an ethical culture. Citigroup has nonetheless been plagued by high-profile ethical lapses, underlining how difficult it can be to embed sound values in a diverse and complex international organisation.
The challenge when Chuck Prince became chief executive officer in 2003 was that Citigroup was under pressure from regulators and suffering severe reputational damage that threatened to tarnish its brand. It had been a prominent provider of finance, on- and off-balance sheet, to Enron, WorldCom, Adelphia and Parmalat, among others.
The bad publicity was not helped by some very maladroit behaviour by bonus-hungry bankers. A prime example related to Citigroup’s role in removing liabilities from the Parmalat balance sheet through a vehicle the bank’s executives chose to call Buco Nero – Italian for Black Hole.
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