In his book The Partnership, Charles Ellis quoted former Goldman Sachs (NYS: GS) Vice Chairman Bob Hurst speaking about his former colleague Jon Corzine's conviction: "It's not that he always thinks he's right; it's that he knows that he's right. That's dangerous."
At a firm like Goldman Sachs, with a strong, established culture and distributed power, that type of attitude can be problematic. But with checks and balances in place to keep everyone -- even the chairman -- in line, serious trouble can be averted.
At MF Global (OTC: MFGLQ), Corzine built an executive team stacked with those who either viewed the world just as he did, or would be unwilling to seriously challenge his decisions. That allowed him to ratchet up risk, leading to a complete meltdown of the company. Click the image below to enlarge.
Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.