The fall of China Aviation Oil is not only because of it trading on the high risk profile derivative products; it is more refers to it incompetence in terms of bad governance (strategy, procedures and enforcement) and implementation of Risk management policies, compliance assessment and trading rules which allowing ill-conceived and poorly defined strategies to run out of control. This requires that up to the highest level in the organisation, including the board, there are people who are sufficiently knowledgeable to identify such activity, analyse it in the context of the company’s other activities, and prepare the ground for a formal decision.