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Boeing Put a Fox in Charge of Its Ethical Henhouse

Fifteen months ago, Boeing's board fired its CEO after two highly publicized scandals. Hoping to repair its ethical image, the board lured former Boeing president Harry Stonecipher out of retirement and gave him the CEO position. Said Stonecipher at the time, "We need to strengthen our reputation with our customers, employees, investors and the communities in which we operate." On Monday, the board acted again, this time tossing out Stonecipher for having an extramarital affair with a company office manager.

"The Board concluded that the facts reflected poorly on Harry's judgment and would impair his ability to lead the company," said Boeing's Chairman Lew Platt. That goes without saying. But now the board should turn its attention to its own poor judgment.

Stonecipher retired from Boeing in June 2002. Four months later, Boeing's chief financial officer Michael Sears had illegal discussions with Air Force acquisitions official Darleen Druyun. The discussions, which centered on Boeing potentially hiring Druyun, took place while she was awarding billions of dollars worth of Pentagon contracts to Boeing. A year after Stonecipher's departure, a federal grand jury indicted two former Boeing officials for illegally acquiring proprietary documents from competitor Lockheed Martin and using them to win a government rocket-launch contract in 1998.

While Stonecipher and Boeing's board would like us to believe the affair was a one-time act of poor judgment by an otherwise ethical leader, we can't ignore that Stonecipher oversaw the company during and immediately before the uncovered illegal activities took place. It would be naïve to discount a correlation between his recent bad behavior and his leadership of a company prone to unethical business practices. By allowing an old fox to guard the chickens, Boeing's board undermined any effort to restore leadership .

What effect does such misbehavior have on Boeing's employees? A 2004 study found that only half of all U.S. workers, just 51 percent, trust their organization's senior leaders. In the wake of stories about leaders like Stonecipher, is it any wonder that many employees associate their bosses with dishonesty and untrustworthiness? When there is discrepancy between what leaders say and what they do, employees recognize those leaders as frauds. And when an imposter's real values are uncovered, employees feel unaligned, lost, and foolish for trusting the leader in the first place.

Consistency between an organization's stated values and its leaders' actual behavior is critical to credibility. That's why all leaders must Live By the Values They Profess.
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