SW LONDON — At dinner last night, a senior banking friend leaned in to me and said: “Why is it that a guy steals £200 and he goes to jail, but a guy like Madoff is still walking around?”

It took me a few moments to realise that it was a genuine question. And one he seemed to have been struggling with for a while.

Today the FT speculates that Vikram Pandit, the CEO of Citigroup for the past year, may lose his job because his “low-key management style and and uninspiring public speaking has failed to lift morale among Citi’s 350,000 employees.” (The article is well worth a read.)

He has admitted that the merger of Citicorp and Travelers, announced on April 6, 1998 was never fully completed. The FT goes on to say that the businesses were never properly integrated, they lacked a common strategy, and had no coherent management philosophy. Executives were pitted against each other and so the good ones left.

The upshot is that the business trundled along by the force of its own momentum, but with parts falling off as it went. It’s sheer size and diversity hid the many mistakes for many years… until now. In a market where there is nowhere to hide: poor governance, lack of vision and incoherent management suddenly look pretty pathetic.

Is it a crime? Not at the moment no. Like the run on the tulip markets, one day it may look cute in it’s naivete. Today it just seems foolish. A shambles, driven forward by hubris and fear.

And all things that could have been avoided by basic organisational communication.

/df