Friday

Friday 28/06/2002

Spotting an embarrassing hole looming in the imperial purse, I phoned up the bank and said, "Can I register my salary for the next six months as an asset, even though it hasn't been paid yet?" "You a client of Arthur Andersen?" they said, somewhat wearily -- I took that as a no, and made other plans. (For hire: 16-year-old youth. Can fit up large chimneys, if greased thoroughly.)

This week has shown more than adequately what happens when you stop believing in the basic law of fiscal physics -- which isn't, much as it would grieve my late grandmother, 'never a borrower nor a lender be', but 'tell people when you rewrite the rule book'. It doesn't look like the rebound from the bubble that's going to do the real long-term damage, but the uncovering of the manifold sins that went into creating enough hot air in the first place. But I bet that every step of the way, the people who made those illegal decisions thought they had to do it for company survival in an overheated and frankly bonkers market.

I've worked for privately owned companies that could and did make multi-year investments, keeping on investing when figures didn't match early expectations because they knew that some things take time. I've worked for companies that lived and died by the 90-day cycle and 'shareholder value', and that one way of working really doesn't fit every model.

One of the arguments advanced when a company went from private to public was that the higher standards of accounting would encourage investors and better corporate governance. It's a shame irony isn't taught as an essential component of an MBA, really.