Darren Jefferson asks just how robust are these Chinese Walls
I made a point of counting how many times during a typical week, the term ‘Chinese Walls’ was used by a variety of advisers.
I got to eight so I thought I better find out more about them, what they’re made of and who builds them.
It’s topical following the recent issue with Capita Group where the CEO has confirmed they have created ‘too complex a business model’ having diversified into many different markets.
During the week where I came across the term eight times it was predominantly from advisers and business development people who were explaining their propositions and because they had ‘Chinese Walls’ in place they could advise both sides or undertake this project without any conflict.
Clearly the corporate message was to diversify and get the work in. Presumably they are not blurring the lines and they genuinely can get comfortable or are they running a longer term risk for short term gain?
Earlier in my career I made a decision to move organisation because amongst other things I could not get comfortable with this ‘we aren’t conflicted and we will run it from another office’.
For me this was too close for comfort and regardless of whether it was right or wrong I felt uncomfortable. Whether firms are diversifying themselves too wide is a matter of debate and only time will tell.
One thing I can say is that different organisations have built their walls out of different materials. Some have used bricks that will withstand a hurricane and others have taken advice from the first little pig..
