Risk Management at Wellfleet Bank: All That Glitters Is Not Gold

Case Solution

Anette Mikes
Harvard Business School ()

This case stimulates a debate on the role of staff functions such as risk management: what does it mean for them to be independent and at the same time be partners in business units? The case describes the corporate credit risk assessment process at Wellfleet Bank (circa 2006-2009) around a vivid corporate credit business proposition and illustrates the decision-making challenges faced by those involved in the case (two senior officers Credit Committee of the Group) dealing with the tensions that arise in common between the sales organization and the risk control function in large financial institutions. In the discussion of the proposal, the cultural tension between the risk function and the business area is highlighted: Should the risk function play the role of police officer or business partner?

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