What’s the worst a company can do? Let’s set aside the obvious, such as those companies that turn out to be phoney when the dishonesty of their bosses is discovered; the likes of Independent Insurance and Versailles among London-quoted companies and – most infamous of all – Enron, on the other side of the pond. They are in a special circle of Danté’s hell.
But what about those sins – corporate rather than corporeal – that may be more insidious than obvious, venial rather than egregious; hard to spot and which do their damage slowly? They may be sins of commission – their bosses set out to do them. They may be sins of omission – companies are too weak to do otherwise. Is raiding the pension fund to pay dividends worse than failing to turn profit into cash? Or carrying the wrong sort of debt worse than owning the wrong sort of assets?
Whichever, here is an investor’s equivalent of the Seven Deadly Sins as committed by companies and as a warning to investors – Seven Deadly Signs, as it were. And, while it would be easy enough to find corporate sins to coincide with gluttony, lust and greed, finding the misdeeds for, say, wrath and envy is altogether a tougher task. So you decide which labels to pin on the following sins.