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Case Study

Downfall Deutsche Bank

By Didier Cossin and Abraham Hongze Lu

14 pages

October 2017

Reference: IMD-7-1927

The case looks at the leadership, governance, board, strategy and other issues that led up to the downfall of Deutsche Bank. It discusses the ideological shift from stakeholder value harmonization to strong shareholder value maximization, which led to a cultural change from valuing reliability, transparency, fairness, solidarity and justice to valuing quick returns that endangered the bank’s future. The changes had a fundamental impact on board dynamics, organizational structure, strategy, risk, compliance, compensation and relationship with key stakeholders. The case looks at various questions such as: What is the purpose of a corporation? What makes a company viable in the long term? How does an ethical board set the purpose of the company? How should a board pick the right leadership? What makes a great leader? How does a leader’s character influence organizational actions? How can toxic leaders walk away with impunity from the damages they cause and go and work elsewhere? How to define shareholder value? What are the pitfalls of shareholder value maximization? What could be the alternatives of shareholder value maximization?

Learning Objective

The ultimate purpose of business
Conflicting interests between stakeholders
The crucial functions of ethical boards
The impact of corporate cultures, leadership succession, and more..

Keywords

Shareholder Value, Board, Governance, Finance, Corporate Governance

Settings

Europe, Germany
Deutsche Bank, Finance and Insurance, Banking
1995-2017

Type

Published Sources

Available Languages

English, Chinese

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