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.

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