Few set out to build a career in insurance. Maybe that explains the dearth of good quality management within the sector at present.
Tidjane Thiam, chief executive of Prudential, has hardly covered himself in glory of late. He's set to hang on to the top job, for now at least, despite his bungled attempt to buy AIG's Asian business for $35.5bn.
His chairman, Harvey McGrath, looks likely to be the fall guy as investors agitate for his removal. Other non-executives on the Pru board, which is horribly bereft of talent – and has been for some time – should be looking over their shoulders too.
As John Kay, who writes on breaking up the banks this week, [see page 79] wrote earlier this month, non-execs need to get past the cult of heroic chief executive and provide a proper foil for their ambitions – Pru's board didn't and a price must be paid.
Looking at the imbroglio at Prudential from his offices in the shadows of the Gherkin in the City, Andrew Moss, chief executive of Aviva, which tried to buy Prudential in 2006, has probably raised a smile or two at the goings-on. But he too should be cautious.
The rebellious investors behind the downfall of Pru's AIA deal, are agitating for his removal, despite an upturn in the insurer's share price.
During the course of the Prudential saga many investors were keen to impart their views to me on Mr Moss, who so infuriated them when he cut the company's dividend by a third last year, after promising not to.
When he graduated from the finance director role at Aviva back in 2007, Mr Moss came in with a fanfare, trumpeting his "One Aviva, twice the value" slogan – a plan to integrate the disparate parts of the insurance giant and double its earnings.
Nearly three years after Mr Moss took the job, his plan hasn't worked. Aviva's share price is about the same as it was when Moss took over.
And those investors who marked Mr Moss's card following the divvy mess are in the mood for mischief.
Mr Moss hasn't helped himself of late by adopting a profile lower than many chief executives typically do. He has left many investor and City presentations to Mark Hodges, who runs Aviva's UK business. Where was Mr Moss at the recent Goldman Sachs conference in Madrid?
Sources close to Mr Moss tell me that he is simply sharing out duties and will speak at other big financial institution conferences later in the year. But many investors I'm speaking with aren't buying the no-show.
The problem that investors have with insurance, and Aviva in particular, is that they simply don't understand how the company makes its money. It's complex and opaque.
Many don't understand Mr Moss's claim that Europe is the place to be either. Although Prudential's execution of the AIA deal was flawed, few can argue with its strategic rationale. In contrast one would be hard pressed to make the same case for Europe.
Of course it's not all doom and gloom, as Aviva's PR man tells me. The group was recently rated as a conviction buy by Goldman Sachs. But perhaps it's not that simple. Aviva is holding an investor conference on 2 July when shareholders will get the chance to grill Mr Moss on all of the above. That is if he turns up.
Danny Alexander proves Lib Dems can be hypocritical as well as tough
Danny Alexander, the coalition's Chief Secretary to the Treasury, should take a long look in the mirror this weekend.
Announcing the results of the Treasury's review of £34bn of spending committed in Labour's dying days, Alexander proved how quickly the Lib Dems have developed a bloodlust for blue-red politics: "The last government committed to spend money it simply did not have. It made commitments it knew the next government could not fulfil and cynically played politics with the hopes of our communities."
The shocking budget deficit certainly proves the veracity of the first sentence, but his second comment was blatantly cynical given the spending cuts he had announced seconds earlier.
First, Alexander could be certain that only £2bn of those £34bn of contracts were unnecessary, which hardly suggests that Labour had been spending willy-nilly in the hope of winning votes. Second, one of the 12 contracts to be axed is an £80m loan to Sheffield Forgemasters, the steel production and engineering group. This is playing politics with the livelihoods of 180 people – and many more once suppliers are factored in. The former business secretary Lord Mandelson is hardly a political novice: the reason he OK'd this £80m loan was to ensure that Forgemasters and the UK became the world leader in manufacturing components for the growing nuclear industry.
The £80m – barely a drop in the ocean – would have built a press and secured those jobs. Moreover, it was a loan, not a coughing up of public money. Forgemasters cannot get such a loan from banks on suitable financial terms.
The Lib Dems don't like anything to do with nuclear. They are desperate to prove to the Tories that they can be every bit as tough as a traditional party of government. And if Alexander has the guts to look himself in the mirror, he will be forced to admit they can be every bit as hypocritical.
Goliath stoned BP proves that smaller may be better
I wasn't surprised to hear BP chief Tony Hayward admit in last week's Congressional inquisition that he didn't know key details about the recent well, set up to deal with the Deepwater Horizon disaster.
On many levels big organisations are too unwieldy and it's difficult for the bosses to keep in touch with the detail. The risks for top management in such companies are there for all to see – that's why they get the big bucks. To be good, big firms need extra controls to deal with the added complexity and conflicts that arise. They weren't there at BP. Clearly big didn't work for most of the world's banks either. Smaller, more efficient City and Wall Street firms have avoided the pitfalls of their larger peers.
Size can often matter but perhaps small is beautiful.