Someone had to pay for the fact that Moody's (NYSE: MCO) is being blamed for not doing a better job predicting the mortgage securities crisis. The reasoning is that the credit ratings agency was too close with some of the companies that issued the paper and did not look hard enough at how the system might come apart in a subprime lending meltdown.
As usual, it is not the CEO who is leaving. Moody's is dumping its president, a sign that the company is contrite, sees the error of its ways, and wants to do better. According to The Wall Street Journal Brian Clarkson's departure "effective by July, marks the highest-profile casualty to date in the controversy over the complicity of credit-rating firms in the subprime meltdown."
Of course, Mr. Clarkson did not act alone. Moody's has scores of analysts who looked at the data on the subprime market. Clarkson was at the top of the pyramid. Of course, the company's CEO was even more so.
The great tradition in American management is that blame should always fall to one person, or a small group of people, when something significant goes off-track at a company. The thinking is usually muddled. Responsibility almost always extends over a wider number of persons.
But, having Clarkson leave is good window dressing.
Douglas A. McIntyre is an editor at 247wallst.com.
Struggling Playboy outsources business ops
J. Crew earnings preview: A strong Q3 all buttoned up?
Twitter to make acquisitions, generate revenue in 2010
