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Whether of an individual, a company or a country bankruptcy is theft. It involves the loss of money by those who have lent any to the entity going bankrupt. However cleverly the jargon covers up the fact, they are the losers and what has happened to them is wrong and illegal.

There are many reasons why people and organisations go bankrupt. Not all those reasons are the fault of the individuals involved in declaring bankruptcy. Some may have had no influence over the causes of the failure. External factors, genuinely beyond their control – such as climate, earthquake, disease, political collapse – cannot be blamed on them.

That is why bankruptcy was created and why we no longer put the bankrupt in prison for life or chop off their heads. Whatever the cause, the act of bankruptcy is devastating for those left without the money they invested.

Some years ago a celebrity lady appeared on television to advocate to the young that they should not hesitate, if they got into financial difficulties, to go bankrupt. She had, she said, done it many times herself and apart from the slight inconvenience of not being able to get a credit card for a year or two it had worked out very nicely for her.

What she failed to tell her young audience was the pain, anxiety and deprivation it had caused many people who through no fault of their known were now less well off than they had been. Today we have entire financial systems advocating bankruptcy as a way out of debt and the consequences, whenever they happen, will be dire.

They will impact mostly the prudent, those who have saved for their old age and those who wish to ensure the independence from disaster of any unfortunate children who might otherwise become dependent on the state or on other people. So the lesson being widely taught today is forget prudence, uncertainty abounds, money may not have its value in a few years time. It’s the old story of eat, drink and be merry.

The ending of that ditty was “…for tomorrow we die”. That is no longer true. We live on, at other people’s expense if necessary, in great discomfort of both body and mind, a liability to ourselves and to the world. Not a happy thought.

We boast good educational systems and yet they have failed to teach the simplest rules about money management to their pupils. The Financial Industry behaves as though it had no responsibility for anybody’s money except its own. Governments hide the stigma of bankruptcy with strange, irrelevant phrases like “take a haircut”.

It is time to teach prudence again, to educate electorates to the consequences of inflation, to reward those who provide and not those who fail to when they could have done. Good financial behaviour starts in our own pockets not in the treasuries of governments.

When the chips are down, they turn out to be your chips – one way or another.

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Enough humility to acknowledge that you may be wrong is the tool to fight dangerous dogma. It needs to be employed whenever the word ‘belief’ is used. Unfortunately many people confuse knowledge and belief and behave as though the latter were the former. We know things that are proven facts; we do not know what we believe. Believing something we know is impossible, although the word is often used loosely in colloquial language.

Humility is a strange quality. Those with it do not talk about it, certainly in relation to themselves. It is manifest mainly by its absence because humility is truth. It is not self-deprecation, which is false modesty, any more than it is boasting. It is recognition, usually quietly, of good and bad characteristics, of worthy and unworthy attributes, of successful achievement and failure.

Religions of all sorts used to put much more emphasis on the second of the three virtues – hope. Hope seems to have got increasingly left out of both religious and management practice in the last century. This is a pity for two reasons. It is an acknowledgement of the vulnerability of faith and it is a legitimate attribute of all who aspire to achieve. Perhaps we should hope more and bang the table a little less?

When dogma dictates bad behaviour what should the remedy be?

Expressions of sorrow to those affected are acceptable to the extent that they can ease the hurt that has been done. Not statements about being humbled, for sure. Any comment about the perpetrator by the perpetrator is merely a form of arrogance. We don’t give a monkey’s umbrella about how he or she feels. What everyone wants to know is what is going to be done to repair the damage and avoid a recurrence.

I illustrate using the two examples of dangerous dogma I have cited.

Murdoch is the head and culture creator of a big media empire. Not personally responsible for encouraging phone hacking, I believe, but absolutely responsible for the way in which the ethos of his business has developed. There are many ways he could have tackled the problem, among them greater transparency, something he is keen to offer for others but reluctant to demonstrate himself.

Had I been in his position I would have endowed a substantial sum of money to a number of Universities – to be chosen independently – to examine ways in which the capitalist model can be successfully modified to accommodate today’s demands for longer-term accounting, more ethical behaviour in business and fairer distribution of wealth without losing the essential driving force of human greed and ambition.

The Catholic Church has a different problem, its pedophilia stemming from practical as well as cultural issues. Apology, certainly, is right, and financial redress, although how you give back innocence is a mystery to me.

If I was Pope, I would announce the end of celibacy for clergy. I would then dress as a priest in a black suit with clerical collar and go to Ireland to take charge of what the Vatican hierarchy has demonstrably failed to grasp. I would repeat the exercise in all other countries affected by the scandal until I was satisfied that such behaviour would not happen again without immediately being reported to the police.

Neither of these suggestions is exclusive and they may be wrong. Both would start to restore some faith in the organisations concerned.

Are they too much to hope for?

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Bang the table and say in a loud voice “I am never dogmatic” and you immediately prove that you are. This is one of the characteristics of dogma, avoiding it is difficult. It comes down to the difference between knowledge and belief. First, what is dogma is and why can it be dangerous?

Two definitions: “An authoritative principle, belief, or statement of ideas or opinion, especially one considered to be absolutely true.” “Opinions settled or fixed by an authority.” There are many more. These two sum up the key points: belief, opinion, authority based, considered to be absolutely true. They both miss one point, that dogma is held fervently, passionately, often to the point where it excludes the possibility that it may be wrong.

Look at the man-made events in the world that cause so much trouble. They are all related to dogmatically held views. I saw the following in a blog on the web yesterday: “A CEO’s job is exclusively the maximisation of the value of the business he runs.” So he has no responsibility for his employees, his customers, his suppliers, the environment, society?

When I was a child of seven I was told that the irrefutable proof of the existence of God was the absence of traffic jams – yes, that is true! The phrase ‘traffic jam’ had not been invented so it was put more positively – ‘the orderly flow of cars onto and on the roads’. There were, of course, relatively few cars in those days.

Terrorism is justified in the name of dogmatic belief in this or that religion or way of life. From the Crusades to today’s civil war in Libya, dogma makes normally rational people do things they would consider outside their usual behaviour. Dogmatic political belief is driving the brinkmanship in Washington where they are trying to decide if the American Government should go bust.

Dogmatic religious belief allows an organisation like the Catholic Church to hold the reputation of the institution more important than the welfare of its members. Dogmatic belief in the wickedness of contraception has caused over-population of poor countries with concomitant suffering to both parents and children – and this in spite of the widespread acknowledgement among the clergy that birth control is both practiced and acceptable.

Dogmatic adherence to the ‘scoop’ theory of newspaper production led to phone hacking. Dogmatic belief in the free and unfettered market gave rise to the statement above about a CEO’s responsibilities. The list is long.

Human institutions are, we are assured, fallible, subject to the whims and follies of our flawed nature. Exactly, and that is why they must never be dogmatic. Firm, vigorous and practical belief in dealing decently with other people is wholly desirable. When it becomes dogmatic it loses the compass of reason and starts to do harm.

How can we hold firm beliefs but avoid becoming dangerously dogmatic? I will offer suggestions tomorrow and do my best to see that they are not dogmatic.

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The gap between the Republican and Democrat proposals for addressing the US budget deficit is the difference between $1.2tn and $2.7tn. These are the amounts by which the two parties would aim to reduce expenditure over a decade. If they do not agree the US Government will go bust on 02Aug11. Neither party proposes to raise new revenue from taxes.

During my lifetime most Finance Ministers have shifted their views from having no responsibility to redistribute wealth to making it their second most important job. Over the same period, the rights of individuals have generally gone from being second to those of society to being the more important of the two. Where is the balance?

Shortly after WWII Britain introduced its National Health Service. The basis of this is that all health shall be free at the point of delivery. It has been, without question, the biggest single social advance in my lifetime. However you measure it, quality of life for everyone has increased more as a result of this service than from any other cause.

The National Health Service (NHS) is not perfect. There are long waiting queues for attention, even at the A&E Departments of hospitals. Over GBP1bn is known to be stolen from the system every year. The NHS is not financially or technically sustainable in its present form. In spite of all this it has delivered something the public could have received in no other way. It has a reputation for good handling of acute cases, a rather less satisfactory record for chronic cases.

Many lessons can be learnt from the UK’s NHS and it is a surprise that some international body has not, as far as I can see, produced a variation on the model attempting to redress the worst of the failings while retaining the basis of accessible health for all. Perhaps everyone has and they are all keeping it to themselves.

Free for all is generally a bad idea. People do not appreciate what they do not pay for even if the amount paid is small if they are poor. But the principle that everyone should have access to medical treatment at a price within their means when they need it is incontrovertible. What the two parties in US are arguing about at present is how much.

Most people acknowledge today that the ever-widening gap between the rich and the poor is unsustainable and obscene. Failure to address it will lead to increasing unrest among the have-nots. Nobody wishes to de-motivate people by taking away what they have rightfully earned but, significantly, the younger generation increasingly looks for rewards other than money to result from its efforts.

Now that there is widespread water and food shortage as well as serious consequential health problems it is surely time to address these issues on a more fundamental basis than dependence on charity. Wealth distribution is here to stay.

We need to examine urgently how best to do it practically and equitably.

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It isn’t only President Obama who is having sleepless nights. In the last three weeks eight people, quite unconnected with each other, have come to me with essentially one problem. They are reasonably secure – by today’s standards – in their jobs, their relationships are intact, they are not rich but their finances are in as good order as can be expected and yet they are losing their self-confidence.

Six of these people are in their mid to late thirties, two are late forties. Five are business women, three, business men. All are educated, bright, adjusted. What is causing this uncomfortable feeling that they are losing their grip, becoming less decisive, worrying more – but about what they are uncertain?

Listening to them reveals a streak of searching for a certainty they have known but lost. They seem to be in the same mental state as someone of eighty who is frightened of falling, taking each step extra carefully and warily.

I have tried to analyse whether there is a single cause, and if not, what might be the reasons for this uncharacteristic behaviour. They are all people of modest but secure stature, the sort who would take charge if there was an emergency and nobody else to do so.

As far as I can detect, and the sample is small, it is a combination of several factors. The increasingly disturbed climate, from earthquakes to floods to droughts, has got people asking for a clearer definition of mankind’s part in this, of what we can and cannot control and of what we should do about both.

Add to climate the last financial crisis and a sense that nobody really understands it or knows whether it has gone away and returned, or is still unresolved. Many people wonder why, if the solution to the world’s financial problems is simply printing more money, we have not done so before. A printing press in every home? Even the least financially educated are not that daft.

Back to the President and his impending bankruptcy. No, I don’t suppose it will happen when for the sake of another trillion or so it could all be delayed and the party could continue until the next presidential elections. But it is disturbing to the see the country responsible for world defense and our international reserve currency arguing about whether it is going to renege on its debts.

In addition, the sight of so many people in high places getting caught with everything from their pants down to their fingers in the till to their eyes to the keyhole has made many wary of following role models. The media now transmit every disaster as it happens and many have their mobiles programmed to deliver devastating news automatically. From great national tragedies to local train crashes we are all systematically over-informed.

The world really is less sure than it was, even a short while ago, and we learn of its follies that much faster. How can we come to terms with the new uncertainties? What is the best way to replace our own failing confidence? I will address these questions tomorrow.

Just keep your fingers crossed that tomorrow does arrive! Only kidding.

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No institution’s survival is more important than the welfare of those it serves. If any organisation behaves in ways other than this, the culture can already be described as rotten. It is the leader’s job is to establish and develop that culture. What is culture and how can it be changed?

The best definition is, I think, “the way in which a group solves problems”. From religious centres to boardrooms, culture is about what we value. It is demonstrated by what we pay attention to and how we behave. When a leader misdirects the culture of which he is the prime mover either the organisation deteriorates badly or the leader must go.

The reason cultures take so long to change is because newcomers to the organisation are taught that the present way to perceive, think and feel in relation to problems is the correct way. Teachers are powerful and a learner is predisposed to accept what he is told, at least until he is established enough legitimately to question the standards and behavior of his institution.

All this makes it sound as though a good leader must be a dictator. The reverse is true. There are times and situations in which total obedience to the leader is essential – in emergencies, for example, when people’s lives are at stake. The best leaders are those whose followers consider that they are contributing to the culture. There is no greater endorsement of anything than whole-hearted participation in it.

The problem is that cultures tend to perpetuate themselves. In helping to revive a declining UK business when I was young I had to close the director’s bar, patronized by those entitled to use it from 10am to 10pm daily. The Chairman was an alcoholic; his lengthening shadow, a hangover. The relatively small act of closing the bar began the rejuvenation of the business which went on to flourish.

Styles of leadership vary not just from one person to another but also from one time to another. What is a suitable wartime style is not necessarily right for peace. Leadership fifty years ago was more dogmatic than it can be today. It must now be collegial, more difficult than a ‘ruler and ruled’ situation. Encouraging people to contribute is itself a major factor in forming a culture. Managing their contributions is a skill many old-style leaders never learnt.

For all the need to involve and engage the members of an organisation, the leader remains the driving force in creating the culture. Shareholders would do well to take more interest in the culture of the businesses in which they invest than the minutiae of the annual report. If they get the right leader they will also get the right rewards.

The organisation truly is the leader’s lengthening shadow.

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Every organisation is the lengthening shadow of one person. Even when that person has given up control, left office or died, their influence may continue for a while. As soon as the new chief is in place and working, his influence starts to dominate and the lengthening shadow becomes his, not his predecessor’s.

What does this mean in terms of day to day management and responsibility? Clearly, not a detailed knowledge of everything that happens. The boss of an organisation employing tens or hundreds of thousands cannot be informed about, and therefore cannot be responsible for, everything all the time. Rogue employees crop up in the best places.

The ‘lengthening shadow’ is the culture and the boss is responsible for it. A few rogues here and there are inevitable. As long as they are quickly identified and weeded out they do little harm. If there are many, they are simply reflecting the culture.

Take two current examples: the Roman Catholic Church and News Corporation. The church claims 1.2 billion followers. It has done much charitable work and been one of the world’s most important teaching institutions. It has had a problem of pedophile priests and nuns. Initially it denied the problem was widespread. I know because I have heard from the pulpit at Mass on Sundays the claim that “a few rotten apples” are to blame.

Any organisation employing an estimated 408,000 priests will have some pedophiles. Nobody knows how many there have been in the church but estimates vary from 5% to 10%. This is not “a few rotten apples” it is a culture. Nobody suggests that Popes, present or recent, are or have been pedophiles but they are the people whose lengthening shadow the behaviour of the church reflects. A Pope is not personally responsible for individual cases of pedophilia; he is responsible for a culture, in this case one that repeatedly denied and then tried to hide the problem.

The same is true of News Corporation employing some 50,000 people. Murdoch’s media empire has done much good work, provided many hours of entertainment and, through investigative journalism, uncovered a lot of malpractice. Now it stands accused of mobile phone hacking on a large scale. Nobody suggests that Rupert Murdoch has hacked personal phones but he is the person whose lengthening shadow is reflected by the organisation where hacking was – it is admitted – endemic.

The heads of both these organisations have apologised for the bad behaviour of their members, as is right and proper. Neither apology has, in my opinion, addressed the problem for which they were personally responsible. What the head of an organisation whose members are guilty of serious misdemeanors should apologise for is the culture he has established which permitted bad behaviour, possibly even endorsed it.

The Pope, Rupert Murdoch and anyone who employs fellow human beings should, regardless of religious belief, consider the story of the cathedral that was bombed in WWII. I cannot verify this story but it is told that a very beautiful statue was destroyed in the bombing. The broken pieces of it were rescued and it was reconstructed, successfully except for the hands. These had been a special feature of the statue and craftsmen were commissioned to replicate them, without success.

After three attempts to replace the statue’s hands the Bishop decided to abandon the effort and called for some wood and a piece of chalk.

He wrote these words: He has no hands, only our hands.

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Very jolly evening listening to the music of Lloyd Webber recently. Real trip down memory lane with a few lesser-known tunes thrown in. LW writes everything from feisty to gentle, from robust to sentimental, from mind-blowing to heart-stirring. He has the skill of creating a tune and developing it over and over so that we become captivated by it. Mozart did the same, with a different genre of music, but the underlying seduction was almost identical.

It should have been more fun than it was for two reasons. It is self-evident that the performance of such music must be sensitive both to the subject and to the melody if it is to work its magic fully. Unfortunately, this did not happen.

Everything from Superstar’s “I don’t know how to love him..” to the tender Pie Jesu from the Requiem Lloyd Webber wrote for his father was belted out at full throttle and without any sense of feeling. If we’d been on the highway we’d have killed someone. As it was, only the songs got murdered.

But I am not playing the role of critic and my complaint is mainly for the other reason the evening was spoilt – volume. Of course, sensible people now take ear-plugs everywhere, as do I. Not many people remember, however, and I wonder how they can stand the pain of the volume – because it does produce real physical agony. When I enquire, I am told that the young lose their hearing so early that only massive beat and noise can penetrate their battered ear drums.

Excessive noise increases deafness, the volume has to be turned up and so the cycle perpetuates itself. Now we have evidence of a further cause of youthful hard of hearing – cigarette smoke. A study of over 1500 US teens aged 12 to 19 suggests that secondhand tobacco smoke directly damages young ears. The greater the exposure the greater the damage.

There is a legal limit to the amount of noise we can make but it is regularly flouted in public places, restaurants, clubs, discos and elsewhere. Noise makes people aggressive, partly because to deal with it they have to shout, an act of aggression in itself, and partly because it increases adrenaline, which is, of course, why it is done. One of the prime causes is the personal music player. Plugged into your ear it cuts you off from worries; turn it up and the outside world seems to disappear.

The time has come to tone down the volume, to relearn the sound of sensitive melody, to hear the music of words spoken beautifully. In a voicemail the other day I mentioned the soul. You will not locate it if the equivalent of a pneumatic drill is pounding your hearing much of the time.  Let us complain about excessive noise wherever we hear it. Let us demand a reasonable volume level in places of entertainment. If we don’t, nobody else will.

That or invest in a hearing aid. It’s your choice.