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The collapse of a European bank in the financial crisis: an analysis from strategic, stakeholder, ethical and governance perspectives






In 2007, the sub-prime mortgage crisis in the US spread to Europe and to the rest of the world leading to a global financial crisis without precedent since the 1930s. Banks stopped trusting each other, pushing the world’s economy into the deepest recession of the post-war era. After the collapse of the Lehman Brothers bank and Northern Rock in the UK, mid-September 2008, the Fortis group was the first major European bank and insurance company to fail in mainland Europe as a result of the financial crisis. Fortis was the leading Benelux financial group, with worldwide activities and one of the top five financial institutions in the EU. Until then, Fortis had been a success story of successive mergers of bank and insurance companies. Its leadership in corporate social responsibility (CSR), stood as a model for international cooperation, with Belgian and Dutch roots. The acquisition of a major part of the important Dutch financial conglomerate ABN AMRO, was a further step to bring Fortis in the top financial groups in Europe, with market leadership in Benelux. However, one year after this acquisition, as a result of the crisis in the financial markets, trust disappeared in the sector, leading to the collapse of the Fortis group. This fall has been one of the key events in the history of the Belgian and Dutch economy, with tremendous impacts and important consequences for all stakeholders and for the Belgian economy. The purpose of this article is to use the collapse process of Fortis’s during 2008 - 2009 as a basis for reflective considerations from strategy perspectives, stakeholder, ethical and corporate governance perspectives. The case analysis of the fall of Fortis based on those perspectives is relevant since Fortis group was internationally recognized as an example of good and leading practice in the field of CSR. Additionally most literature on causes of irresponsibility is in the fields of economics, and specifically the economics of market failure. The business ethics literature tends “not to address explanatory questions about the causes of CSR breaches” (Mackenzie 2007: 936).

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  • Y. Fassin & D. Gossselin, 2011. "The collapse of a European bank in the financial crisis: an analysis from strategic, stakeholder, ethical and governance perspectives," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 11/726, Ghent University, Faculty of Economics and Business Administration.
  • Handle: RePEc:rug:rugwps:11/726

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    1. repec:dau:papers:123456789/406 is not listed on IDEAS
    2. Marcoux, Alexei M., 2003. "A Fiduciary Argument Against Stakeholder Theory," Business Ethics Quarterly, Cambridge University Press, vol. 13(1), pages 1-24, January.
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    Cited by:

    1. Francisco Javier Forcadell & Elisa Aracil, 2017. "European Banks' Reputation for Corporate Social Responsibility," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(1), pages 1-14, January.
    2. Shahzad Uddin & Javed Siddiqui & Muhammad Azizul Islam, 2018. "Corporate Social Responsibility Disclosures, Traditionalism and Politics: A Story from a Traditional Setting," Journal of Business Ethics, Springer, vol. 151(2), pages 409-428, August.
    3. Alan J. Kearns, 2017. "Rebuilding Trust: Ireland’s CSR Plan in the Light of Caritas in Veritate," Journal of Business Ethics, Springer, vol. 146(4), pages 845-857, December.
    4. Dancsik, Bálint, 2020. "Rendszerszintű kockázat rendszerszintű erkölcs nélkül. Kiegészítések a pénzügyi válságok etikai magyarázatához [Systemic risk without systemic ethics. Supplements to the ethical explanation of fina," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(3), pages 225-243.
    5. Park, Kathleen Marshall & Meglio, Olimpia & Schriber, Svante, 2019. "Building a global corporate social responsibility program via mergers and acquisitions: A managerial framework," Business Horizons, Elsevier, vol. 62(3), pages 395-407.
    6. Diego F. Uribe & Isabel Ortiz-Marcos & Ángel Uruburu, 2018. "What Is Going on with Stakeholder Theory in Project Management Literature? A Symbiotic Relationship for Sustainability," Sustainability, MDPI, Open Access Journal, vol. 10(4), pages 1-1, April.
    7. Cantrell, Brett W. & Yust, Christopher G., 2018. "The relation between religiosity and private bank outcomes," Journal of Banking & Finance, Elsevier, vol. 91(C), pages 86-105.
    8. Dulce Redín & Reyes Calderón & Ignacio Ferrero, 2014. "Exploring the Ethical Dimension of Hawala," Journal of Business Ethics, Springer, vol. 124(2), pages 327-337, October.
    9. Vita Akstinaite & Graham Robinson & Eugene Sadler-Smith, 2020. "Linguistic Markers of CEO Hubris," Journal of Business Ethics, Springer, vol. 167(4), pages 687-705, December.
    10. Juan J. Nájera-Sánchez, 2019. "A Systematic Review of Sustainable Banking through a Co-Word Analysis," Sustainability, MDPI, Open Access Journal, vol. 12(1), pages 1-1, December.

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