Corporate Governance: Lessons From Barings

The collapse of Barings plc at the end of February 1995 brought two official inquiries which reported very promptly. The British report was made public on 18 July, just over four months after the failure. The Singaporean investigation into the workings of the Barings subsidiary was completed at the beginning of September. Revelations about the events and courses of problems are colourful as well as damning. There are issues in corporate governance arising from this experience. However, an analysis of the workings of Barings plc is essential if substantial understanding of what took place and why is to be secured. The British report did not attempt such an analysis. This oversight hampered analyses of the handicaps to effective funds and risk management as well as failure to develop informative and accurate accounts for auditing, credit control and funding purposes. The governance implications are treated exhaustively.