Empowerment

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When that inter-affiliate ISDA negotiation has been going so long there are sizeable parts of your risk management team who were still in school when it began, and others, then in the primes of their careers, have since retired, we wonder whether the crux of the problem really is the scope of the requested sovereign immunity waiver, or whether it hasn’t got more to do with how your own organisation is organised, and how it fails to empower — or trust — those it puts in the front line of the negotiation.

“Send people authorised to make a decision” is a management truism that seems well out of fashion.

Here we are talking about “empowerment” not in the sense of yogababble about how we should all be actualised to be the best versions of ourselves — HR will be all over that, and they can have it, frankly — but in the sense of having the autonomy and authority to make pragmatic decisions on the spot to make your own organisation go.

The immutable trajectory of management orthodoxy favours policy over judgment, process over insight, evidence over intuition — fundamentally substance over form — and in so, doing pushes each enterprise towards ultimate stasis which will only collapse when the firm does, as a result of some non-linear chain reaction the learned authors of its risk taxonomy somehow didn’t foresee.

Any commercial collective is a tussle between the resistible force of subject matter expertise — wielded by those who know what they are meant to, why, and what will happen if they don’t do it, and derive pride and satisfaction from thereby improving things — and the immovable object of policy, process, precedent: the sclerotic infrastructure that trusts no such person further than she can be thrown, and is stout in its resistance of any kind of risk, however theoretical or academic.

The forces of substance and of form wrestle in any organisation: the bigger and older it is, the more likely the subject matter expert who yearns for a crumb of authority to conduct its affairs will be disappointed. She may want little more than the opportunity to stand on the deck, in the sun, blowing wistfully into the sail — an action that, by itself, will vouchsafe ineffable meaning in her career, even if it doesn’t really move the vessel — but even that will be denied her.

She will be institutionalised, worn down and broken. Her fresh eyes will cloud, her shoulders will sag, she will mutter distractedly, saying “leverage” when she means “use” — all these deteriorations in the service of a descent towards the same fate we all share: a lifetime nosing boulders back up the same slope we have just slithered down.

We all know the feeling: the credit department policy that requires cross default in a spot contract; the clearing house which demands an unlimited indemnity for losses it might suffer but that it cannot, even in the hypothetical, articulate; the disclaimer of liability for ones’ own misperformance, notwithstanding normal or even gross negligence.

In each case, we know these terms to be preposterous, but we know just as well that the prescribed process for winning derogation from them is so monstrous as to be unthinkable, so we externalise our suffering and pass it to our clients.

And spare a thought for your client’s negotiation team. Will they be any more empowered than you? They will not. These poor souls have their own policy crosses to bear, many just as palm-faced as yours, only different. Presented with your enstilted nonsense, they will have no choice but to object to it and perhaps even counter it with theirs.

It is the legal eagles’ sacred covenant to make sure their firm does not endanger itself by reckless contract. Their domain being of law and not fact, it is theoretical recklessness and juristic endangerment they must root out: that no-one would be so misguided to try to use these protections ina live-ammunition environment can form no part of the calculus.

And so it is we find bald men fighting over combs no-one wants in micro-soap operas across the city, because other bald men, with barely any more interest in them, have made a policy that all men must have combs.

See also

• The Inter-affiliate ISDA negotiation
• The Victory of Form over Substance
• Drive: The Surprising Truth About What Motivates Us