Case Study Of Fortis

1965 Words8 Pages
Q1: What, according to Fassin and Gosselin, were the key governance failures of the Fortis
Board in the period under review? Would you agree with their assessment?
A selected number of key events of the history of Fortis will be reviewed from different ethical frameworks. The main theme of the paper focusses on the fairness of communication, shareholder activism and conflicts of interest of CEO’s merger opportunities. Also key to note is the fact there was confrontation between Corporate Social Responsibility (CSR) and the reality raises questions as to why the CSR guidelines and ethical principles did not help in the assessment of risk.
Brief Background:
The Fortis Group was the first mainland European Bank to fail as a result of the financial
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However, one year after this acquisition, as a result of the crisis in the financial markets, trust disappeared in the sector, leading to the collapse of the Fortis Group.
Main Body:
The article’s purpose is to highlight Fortis’s recent collapse as a basis for reflective considerations from stakeholder and ethical perspectives. The Fortis case highlights the complexity of stakeholder analysis & also the dynamic perspective in stakeholder theory.
What is interesting to note is the fact only one shareholder questioned the recklessness of the ambitious strategy to commit €24 billion to acquire RBS, Santander & ABN AMRO. The acquisition plan was supported overwhelmingly and won 95% of the votes. As the sub-prime crisis started to have an impact in America, in order to finance the deal Fortis had to increase its capital substantially.
The share issue in Sept 2007 was a success thanks to a huge discount premium. Shortly after, the
Chinese Financial Group Ping An took a 4.18% stake with the agreement of top Fortis Management.
As rumours of collateralised debt obligations in European Banks increased, a private placement
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