Corporate Cult of Personality
The article was spurred on by Jake DeSantis from AIG's Financial Products Group, whom I previously wrote about when he wrote an op-ed for the New York Times. It describes how things evolved at AIG's Financial Products Group and now the risk level grew so large that it dragged down the company and many of the large Wall Street banks. Behind this increase in risk was group head Joseph Cassano. In Lewis's article, you can read how Cassano's lack of understanding of how their underlying business worked and his over-aggressive personality drove AIGFP to take on way too much risk.
There is an important lesson here for any executive and board of directors. Companies take on the personality and the ethics of their leaders. If you have an executive who will 'win at all costs,' you will end up with a company that will also win at all costs. And, the costs may be more than you are willing to bear. When I hired CEOs, I always focused on ethics and responsibility since those were characteristics I wanted to see throughout the organization. Being aggressive and driven is also very important, but you have to keep those in check with some responsibility.
No one in the article accuses Cassano of being corrupt. But, he didn't understand the risk he was taking, and didn't seem to care when it was pointed out. That's when the greed overran the responsibility. That's a bad trade-off. But, that's what you get when that's the personality of the person running the company.