Decline of a golden boy

What a fall from grace! There's no doubt that Thomas Middelhoff has now secured a spot in the annals of German corporate history. Of course, in the last few years, we've seen other trials against executives, and the three years he has been sentenced to do not place him among the most evil corporate villains of all time either.

No, it's something else: it's the brilliance, the managerial glow, he once exuded. He was known as the "golden boy of turbo capitalism," he is credited with dragging publishing behemoth Bertelsmann out of its dusty corner into a bright, multimedial future. Hopes were high when he took over at Karstadt owner Arcandor.

Where he failed spectacularly. While he managed to quadruple revenues in his four years at the helm of Bertelsmann, he couldn't replicate that success at Arcandor. He made decisions that dragged down the company's finances. Within his four years as CEO, Arcandor's share price plummeted from 10 euros to 1 euro. In March 2009, he threw in the towel - not without making a few million euros in the process, mind you. Six months later, Arcandor went into administration.

It wasn't for a lack of money that he failed. In court, his lawyers stressed that their client had been working around the clock, making every minute count.

But did he really need 600-plus flights in a private jet, to New York for example, which set the company back over 90,000 euros for one flight? The answer is "no," that's what you call losing your sense of proportion.

Middelhoff obviously got caught in a complicated financial web to fund his lavish private lifestyle, too. This latest trial is just one of many he has been involved in, either as plaintiff or defendant.

Creditors are demanding he pay back what he owes them, which he can't because a private bank has frozen his assets. On the rare occasions he leaves his residence on the French Riviera, it's usually for another tour around the German courts.

On one of those occasions, bailiffs seized one of his more expensive wristwatches, and Middelhoff was later seen escaping through a window and across adjacent roofs, apparently to dodge the media. It wasn't even funny anymore, it was just plain ridiculous.

Granted, Middelhoff is not an isolated case. Others before him have gone from the top flight straight to prison. But he is perpetuating that negative stereotype of the greedy executive.

He was in a position of power and he abused it. But, first and foremost, he was brilliant at presenting a polished image of himself.

The crucial question that remains is: every company has a system of checks and balances. So, what went wrong in a system that apparently allowed someone like Middelhoff to pull the wool over the supervisory board's eyes for years?