Case Study

Failure of corporate governance at UBS

10 pages
July 2008
Reference: IMD-3-2003

In April 2008, UBS was the bank that had been hit hardest by the subprime crisis. Due to its high risk exposure, UBS had to write down almost US$ 40 billion. The first consequences were already drawn, such as the removal of UBS’s chairman Marcel Ospel. But was that enough for a major Malaysian pension fund which was considering to invest money in UBS? Was UBS’ corporate governance fit or was the board – as the ultimately responsible body – unaware of the risks and unable to deal with them? What was needed to improve the situation?

Learning Objective

Discuss the board’s and the investor’s responsibility in a bank’s risk exposure and risk strategy. Also learn how to possibly voice concerns in a board with a chairman, who was considered wily, ruthless and mercurial.

Corporate Governance, Board of Directors, Banking, Corporate Failure, Chairman, Chief Executive Officer
Union Bank of Switzerland
Published Sources
© 2008
Available Languages
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