Lessons from a tragedy

The top managers of listed companies are rarely assessed, and only when they wish. They step into the spotlight only when things go well and there are expansion plans to feed to the media, and the shareholders. The praise heard during these bright moments can easily vanish if times change for the worse or a catastrophe happens. Unfortunate events, such as the tragedy that struck the workers at Corinth Pipeworks, are part of life. Obviously, no one wanted it to happen and we all mourn the innocent victims. It is not possible to claim, however, that the company’s management can be absolved of responsibility over the conditions prevailing at the factory. Even worse, the management appears to lack the ability to respond to the emergency in a straightforward and convincing fashion. This is obvious from the detached way in which they responded to the event right from the start, as if it concerned some other company, in a faraway country. The statement issued by Corinth Pipeworks merely said the firm would cooperate with firefighters and police in order to shed light on the causes of the accident. And we thought that they would know what had gone wrong in their plant, what was and was not working and what condition their equipment was in. In its turn, the parent company, the Viohalco metals group, rushed to declare in a statement that it only has a negligible direct stake in the company. So, who really knows what is going on at Corinth Pipeworks? This is not just a question that should interest the police. It should concern investors, as well, because it shows how badly some companies are managed. Clearly, managers do not mean to devalue their company. However, they make mistakes in management, the way they deal with human resources or the way they communicate. Why should we trust them to make the right investment decisions?