I have no way of evaluating the veracity of UBS AG’s claim, but I like the sound of it. Admitting problems and detailing plans to fix them is always a better strategy than sweeping problems under a rug woven of denial and empty boasts. By contrast, AIG attempted the latter tack when, on the eve of their demise, they approved an ad campaign with the disingenuous slogan, “The strength to be there.”
For a positive example, consider a decades-old incident in which Chrysler Corporation was caught resetting odometers to zero after test-driving new vehicles. Then-chairman Lee Iacocca publicly admitted to and apologized for the practice. Chrysler would continue testing vehicles, he said, because that’s a good idea; but they would cease resetting odometers because, he admitted, that was a bad one. The incident ebbed as fast as it arose. I suggest that was partly due to the fact that Iacocca addressed it with candor instead of subterfuge.