More Corporate Shenanigans
Corporate governance has taken it on the chin in the past few days. Over the past week:
· The U.S. Justice Department and the Securities Exchange Commission announced an investigation of Hewlett-Packard for allegedly bribing foreign officials to secure a lucrative computer equipment contract in Russia. German and Russian prosecutors are already investigating the matter, which is thought to include bribes totally $10.9 million.
· Private-equity firm Quadrangle Group accused its co-founder Steve Rattner of complicity in a kickback scheme aimed at winning business from New York State's pension fund. Rattner, the Obama administration's former car czar, is suspected of paying millions of dollars in bribes to obtain investment business from the pension fund.
· The SEC filed charges against Goldman Sachs and one of its vice presidents for supposedly falsifying and omitting information about an investment vehicle the company was peddling. The suit accuses the Wall Street bank of selling customers a subprime-mortgage investment, knowing that it would lose value, in order to reap fee income.
Agree or disagree: At the risk of causing Ronald Reagan to roll over in his grave, the government needs to impose greater oversight on big business. I'd like to know your thoughts.
Labels: business, credibility, ethics, integrity, trust, values
Bookmark this post on del.icio.us
Take it from someone in a country with much less (or at least less effective) business regulation. It's not the end of the world but businesses large and small do overstep many moral, if not legal, boundaries. I agree with you.
What do you think? Post a Comment
A "Sorry" Excuse for Leadership
Last week, two former top-ranking Citigroup officials apologized on Capitol Hill for taking the banking giant to the brink of extinction. Former CEO Charles Prince and ex-board member Robert Rubin offered repentance to the Financial Crisis Inquiry Commission.
Prince ran the company from 2003 through 2007. During much of his watch, Citigroup ran up billions of dollars in losses, eventually causing the U.S. government to spend $45 billion to prevent its collapse. "I'm sorry," said Prince, "that our management team, starting with me, like so many others, could not see the unprecedented market collapse that lay before us."
For his part, Rubin offered regrets but refused to accept responsibility for the day-to-day operations that created the Citigroup debacle. Like Prince, he indicated that the entire banking industry shared the blame, saying that nearly everyone "missed the powerful combination of forces at work and the serious possibility of a massive crisis."
But committee chair Phil Angelides wasn't willing to let the two off the hook so easily. As Angelides put it, "You were either pulling the levers or asleep at the switch."
Thanks for the apology, guys. I hope you're not offended if your former employees, customers, and stockholders don't forgive you immediately.
Prince ran the company from 2003 through 2007. During much of his watch, Citigroup ran up billions of dollars in losses, eventually causing the U.S. government to spend $45 billion to prevent its collapse. "I'm sorry," said Prince, "that our management team, starting with me, like so many others, could not see the unprecedented market collapse that lay before us."
For his part, Rubin offered regrets but refused to accept responsibility for the day-to-day operations that created the Citigroup debacle. Like Prince, he indicated that the entire banking industry shared the blame, saying that nearly everyone "missed the powerful combination of forces at work and the serious possibility of a massive crisis."
One might be inclined to admire these leaders for their feeble attempt at falling on their swords. But remember: we're talking about Citigroup, an institution that has repeatedly been embroiled in misbehavior. As the Wall Street Journal said in August 2008, shortly after Prince's reign, "Name nearly any scandal, incompetence or hiccup suffered by the financial industry in the past decade or so, and the chances are Citigroup will have been at its forefront." And Prince and Rubin are two of the leaders who oversaw those failures.
Labels: business, credibility, ethics, integrity, leadership, trust, values
Bookmark this post on del.icio.usLeopards and Their Spots
Attempting to protect their stock prices and credit ratings, big banks have been temporarily lowering the debt levels they use to fund securities trades. For the past five quarters, institutions including Citigroup, Goldman Sachs, Bank of America, and J.P. Morgan Chase, lowered their debt levels an average of 42 percent just before releasing financial results to the public. Then, according to data from the Federal Reserve Bank of New York, those banks promptly restored their risky debt levels in successive quarters.
While technically legal, the practice misleads investors about the amount of risk the banks are actually incurring.
It's important to note that this deception has been going on for fifteen months, roughly the same amount of time our tax dollars have propped up these companies' battered balance sheets. Obviously, the people who run these institutions have not learned from their mistakes or made any efforts to change their misguided ways.
Clearly the banking crisis is, in fact, a leadership crisis.
Labels: business, ethics, integrity, leadership
Bookmark this post on del.icio.us
You said that "Clearly the banking crisis is, in fact, a leadership crisis." I'd add the caveat that the banking crisis is a MORAL leadership crisis.
A moral leader doesn't dissemble, obfuscate, hide, or deceive. They don't play with words and say things like "we'll pay all legitimate claims" knowing they'll fight forever over what is legitimate.
Thanks for pointing out these leopards.
A moral leader doesn't dissemble, obfuscate, hide, or deceive. They don't play with words and say things like "we'll pay all legitimate claims" knowing they'll fight forever over what is legitimate.
Thanks for pointing out these leopards.
What do you think? Post a Comment
Liar, Liar, Pants on Fire…
On October 11, 2007, former North Carolina senator and presidential hopeful John Edwards spoke to reporters about rumors that he had an extramarital affair with campaign staffer Rielle Hunter. "The story is false," ABC News timeline "It's completely untrue, ridiculous." In the meantime, his wife Elizabeth was battling breast cancer.
On August 8, 2008, weeks after Edwards was spotted visiting Hunter at a Beverly Hills hotel, he publicly confessed the affair to an ABC News reporter. However, he vehemently denied being the father of Hunter's six-month-old baby. As if to salvage some of his tarnished image, he made certain to mention that his wife's cancer was in remission when the affair began.
Fast forward to January 21, 2010. In a statement issued to NBC news, Edwards admitted that he is indeed the father of Hunter's daughter. "It was wrong for me ever to deny she was my daughter and, hopefully, one day, when she understands, she will forgive me," Edwards said in his statement. Edwards' disclosure came just as another of his campaign aides, Andrew Young, would admit to claiming paternity for Hunter's child as a favor to the candidate.
So What Else is New?
Certainly, the "bombshell" revelation that a politician lied to the public should not come as a surprise. Politicians lie all the time, don't they? And didn't we all suspect that Edwards was fibbing all along? What is surprising is how easily he lied.
But here's a question for you. If he had come clean immediately, would that change your opinion of Edwards? If he had responded to the early rumors by saying, "Yep, we had an affair and there's a baby on the way," would you have more or less respect for him today?
Leaders confront the how-much-to-reveal dilemma all the time. Maybe there's an organizational shakeup coming six months down the road that will undoubtedly impact employees. Should you tell them now and give them adequate time to prepare (even if that means some good people might look for other jobs)? Or should you wait a few months in case the plans change and the turmoil can be avoided?
Your answer determines how much credibility you have. Face it: politicians have reputations as liars for a reason. Seriously, will you ever believe another thing John Edwards says? I, for one, am even having trouble buying his claim that he hopes his daughter will forgive him one day.
When faced with the choice of being too honest or just honest enough, err on the side that will preserve your credibility.
On August 8, 2008, weeks after Edwards was spotted visiting Hunter at a Beverly Hills hotel, he publicly confessed the affair to an ABC News reporter. However, he vehemently denied being the father of Hunter's six-month-old baby. As if to salvage some of his tarnished image, he made certain to mention that his wife's cancer was in remission when the affair began.
Fast forward to January 21, 2010. In a statement issued to NBC news, Edwards admitted that he is indeed the father of Hunter's daughter. "It was wrong for me ever to deny she was my daughter and, hopefully, one day, when she understands, she will forgive me," Edwards said in his statement. Edwards' disclosure came just as another of his campaign aides, Andrew Young, would admit to claiming paternity for Hunter's child as a favor to the candidate.
So What Else is New?
Certainly, the "bombshell" revelation that a politician lied to the public should not come as a surprise. Politicians lie all the time, don't they? And didn't we all suspect that Edwards was fibbing all along? What is surprising is how easily he lied.
But here's a question for you. If he had come clean immediately, would that change your opinion of Edwards? If he had responded to the early rumors by saying, "Yep, we had an affair and there's a baby on the way," would you have more or less respect for him today?
Leaders confront the how-much-to-reveal dilemma all the time. Maybe there's an organizational shakeup coming six months down the road that will undoubtedly impact employees. Should you tell them now and give them adequate time to prepare (even if that means some good people might look for other jobs)? Or should you wait a few months in case the plans change and the turmoil can be avoided?
Your answer determines how much credibility you have. Face it: politicians have reputations as liars for a reason. Seriously, will you ever believe another thing John Edwards says? I, for one, am even having trouble buying his claim that he hopes his daughter will forgive him one day.
When faced with the choice of being too honest or just honest enough, err on the side that will preserve your credibility.
Labels: communication, credibility, employees, integrity, leadership, trust
Bookmark this post on del.icio.us10 Great Leadership Blunders: 2009
In the spirit of the countless year-in-review lists that appear every January, I'm happy to present the Vital Integrities Blog's annual ranking of the ten dumbest leadership actions of the past twelve months. From corporate scandals to political missteps to coaching shenanigans, 2009 was jam-packed with stories of stupid leadership behavior. Here, then, are just ten examples of dim-witted leadership moves appearing in the news last year.
1. As the year began, Bank of America CEO Ken Lewis basked in the glory of his company's acquisition of Merrill Lynch. At a time when financial institutions were collapsing all around him, Lewis had brilliantly snagged a coveted prize -- or so it seemed. As it turned out, Merrill Lynch had its own problems: $15 billion in losses that Lewis knew about but neglected to disclose to BofA shareholders. Lewis also forgot to mention that, as part of the deal, BofA had approved the payments of $5.8 billion in bonuses to the very Merrill executives who created the losses. Before long, Lewis was asking Congress for an additional $20 billion in taxpayer aid, bringing the government's total BofA bailout to $45 billion. Bamboozled stockholders wisely booted him as board chair, and the SEC has filed charges. The beleaguered Lewis gallantly resigned as CEO.
2. Pilots captaining a Northwest Airlines flight from San Diego to Minneapolis led their passengers off course -- by 150 miles! Tim Cheney and Richard Cole claimed they were so engrossed in deciphering the airline's new crew-scheduling system on their laptop computers that they lost track of time and forgot to land the plane (Delta Airlines acquired Northwest earlier in the year). Air traffic controllers, unable to establish radio contract with the plane for 77 minutes, feared it had been hijacked and notified military officials. As a result, air defense commanders readied fighter jets for a possible midair interception. The FAA promptly revoked the pilots' licenses and, hopefully, confiscated their laptops.
3. When Carlotta Freeman reported that a male co-worker was badgering her with "sexually explicit and racially charged statements," her supervisor at the Whirlpool plant in La Vergne, Tennessee told her to ignore him. When the harassment continued, that same supervisor offered another brilliant solution: he suggested that Freeman give in and have sex with the man. The verbal abuse persisted before turning physical: angry that she reported him yet again, Freeman's white harasser punched her in the face and knocked her onto an assembly line. In court, Whirlpool tried to deny its responsibility in the incident; however, federal Judge John T. Nixon found that every level of management mishandled Freeman's complaints and ordered the company to pay her $1 million.
4. Managers at a Wal-Mart store in Easton, Pennsylvania were concerned that employees were stealing merchandise. So, hoping to catch dishonest workers in the act of shoplifting, the supervisors secretly installed a video camera: in a public unisex bathroom! Employees, who also used the bathroom as a changing room, discovered the surveillance camera and complained. According to a lawsuit filed against Wal-Mart, management fired three of the workers for reporting the unlawful invasion of privacy.
5. The dumbest-comment-by-a-leader award goes to Secretary of Homeland Security Janet Napolitano. After a passenger aboard a Christmas Day flight from Amsterdam to Detroit attempted to set off an explosive device, Napolitano announced on CNN that "the system worked." Critics swiftly pointed out that the "system" she was referring to allowed a would-be bomber, whose name had been added to a database of possible terrorists, to board an international flight without any luggage and with a one-way ticket that he paid for with cash. Napolitano claimed her remark had been taken out of context, but later conceded, "Our system did not work in this instance."
6. After U.S. taxpayers coughed up $173 billion to rescue financial behemoth American International Group from certain extinction, the company paid its top executives $165 million in bonuses. It was that kind of audacity that prompted government pay czar Kenneth Feinberg to implement a $500,000 salary cap for executives of bailed-out companies. For some leaders at AIG, that meant sizeable pay cuts. So Anastasia Kelly, AIG's general counsel, led a handful of executives who threatened to resign if the cap was enforced. While the other executives changed their minds, Kelly made good on her warning and quit. Now that's a system that works. As if to prove that AIG executives are clueless, CEO Robert Benmosche issued a press release saying, "On behalf of the management team, employees, and the Board of Directors, I would like to thank Stasia for her tireless service to the company."
7. Texas Tech University officials fired head football coach Mike Leach for mistreating an injured player. After receiver Adam James was diagnosed with a concussion, Leach allegedly ordered trainers to put him in "the darkest place you can find." And they obeyed, forcing James to stand in an unlit equipment room while the rest of the team practiced. According to James, the former Big 12 coach of the year isolated him again two days later in a noisy electrical closet; when the buzzing became unbearable, trainers moved him to an empty pressroom and again told him not to sit. TTU booted Leach days before the Red Raiders were to play in the Alamo Bowl, and mere moments before Leach was to collect an $800,000 bonus.
8. Speaking of dumb coaches: The Covenant School in Texas fired girls basketball coach Micah Grimes for inflicting a 100-0 pounding over opponent Dallas Academy. Officials at Covenant, a private Christian high school, promptly apologized for the blowout and moved to forfeit the game. Dallas Academy teaches students struggling with diagnosed learning differences. For his part, Grimes refused to apologize for the smack down, saying his team "played with honor and integrity."
9. For several days in June, residents of South Carolina did not know where their Governor Mark Sanford was. Not to worry, said his staff eventually; the governor is off "hiking the Appalachian Trail." That phrase soon became a naughty euphemism when Sanford later admitted that he had in fact been secretly visiting his mistress in Argentina. Efforts to impeach Sanford were unsuccessful, but his wife told him to take a hike.
10. It was a bad year for South Carolina Republicans. As President Obama addressed a joint session of Congress on health care reform, Representative Joe Wilson angrily shouted, "You lie!" The emotional outburst stunned politicos on both sides of the aisle. "No president has ever been treated like that. Ever," said White House chief of staff Rahm Emanuel. Wilson later apologized for his "lack of civility."
Labels: credibility, integrity, leadership, management
Bookmark this post on del.icio.usWhat do you think? Post a Comment
Leonard Abess
Leonard Abess likes to read annual reports. As the head of City National Bank in Miami, he especially likes to study the annual reports of other banks. He always pays particular attention to the opening letter written by the corporation's CEO. It struck Abess as backward that CEOs begin the final paragraphs of their letters with the phrase, "And last but not least, we wish to thank our loyal employees…" Why, he wondered, are the employees the last to be mentioned? In his letters, he always likes to acknowledge his employees first.
Last fall, Abess sold his majority stake in City National. In a business environment in which many corporate leaders have demonstrated mindboggling personal greed, he did something remarkable. He gave $60 million of his proceeds to 471 current and former employees. It was, he said, something he'd been planning to do for more than 20 years.
When deciding how to allocate the money, Abess created an undisclosed formula based on longevity. Recognizing that the highest ranking -- and thus, highest paid -- employees had the shortest tenure, Abess gave the largest amounts to those who had been with City National the longest. As a result, some long-term employees received bonuses equal to nine times their annual salaries.
At a time when the country has lost faith in the leaders of its major financial institutions, what Abess did is highly unusual. He wishes it wasn't. "I prefer to live in a world where this is ordinary," he has said.
Me too.
Last fall, Abess sold his majority stake in City National. In a business environment in which many corporate leaders have demonstrated mindboggling personal greed, he did something remarkable. He gave $60 million of his proceeds to 471 current and former employees. It was, he said, something he'd been planning to do for more than 20 years.
When deciding how to allocate the money, Abess created an undisclosed formula based on longevity. Recognizing that the highest ranking -- and thus, highest paid -- employees had the shortest tenure, Abess gave the largest amounts to those who had been with City National the longest. As a result, some long-term employees received bonuses equal to nine times their annual salaries.
At a time when the country has lost faith in the leaders of its major financial institutions, what Abess did is highly unusual. He wishes it wasn't. "I prefer to live in a world where this is ordinary," he has said.
Me too.
Labels: business, employees, integrity, leadership, management, values
Bookmark this post on del.icio.usNetApp: A Great Place to Work
Looking for a great place to work? Consider applying at the Mountain View, California headquarters of Google. Among the perks enjoyed by Google employees are onsite haircuts, free laundry facilities, workout and massage rooms, in-house childcare, and car washes. And then there's the free food. The campus has eleven cafeterias serving everything from gourmet meals to M&Ms. Legend has it that Google workers are never more than 150 feet away from free food. No wonder the company topped Fortune’s list of the 100 Best Companies to Work For in 2007 and 2008.
But there's a new number one company on the Fortune list this year: storage and data management company NetApp. Unlike Google, which got to the top largely by providing employees with lots of goodies, NetApp earned the number one spot because of its culture of trust. NetApp's leaders promote an atmosphere of openness and honesty, and they go out of their way to proactively share information with workers.
Robert Levering and Milton Moskowitz, whose Great Place to Work Institute has been compiling information on great workplaces since 1980, have been quoted as saying, "The most important factor in selecting companies for this list is what employees themselves have to say about their workplace." For their part, NetApp employees say they appreciate how easy it is to share ideas, get answers to questions, meet with senior leaders, and find opportunities to take responsibility. Funny, no one mentions wanting free M&Ms.
At number four on the 2009 list, Google is still clearly a great place to work. And Google's culture of fun, high energy, and innovation undoubtedly attracts as many people as the free chow does. But NetApp's elevation reveals how important trustworthy leadership is to workers in today's business environment. "Perks are nice, but employees are looking for something more basic," Levering and Moskowitz have noted. "They want to be told the truth, especially if the news is bad."
If you want employees to consider your company a great place to work, focus less on promoting financially oriented rewards and more on demonstrating the values that attracted them in the first place.
But there's a new number one company on the Fortune list this year: storage and data management company NetApp. Unlike Google, which got to the top largely by providing employees with lots of goodies, NetApp earned the number one spot because of its culture of trust. NetApp's leaders promote an atmosphere of openness and honesty, and they go out of their way to proactively share information with workers.
Robert Levering and Milton Moskowitz, whose Great Place to Work Institute has been compiling information on great workplaces since 1980, have been quoted as saying, "The most important factor in selecting companies for this list is what employees themselves have to say about their workplace." For their part, NetApp employees say they appreciate how easy it is to share ideas, get answers to questions, meet with senior leaders, and find opportunities to take responsibility. Funny, no one mentions wanting free M&Ms.
At number four on the 2009 list, Google is still clearly a great place to work. And Google's culture of fun, high energy, and innovation undoubtedly attracts as many people as the free chow does. But NetApp's elevation reveals how important trustworthy leadership is to workers in today's business environment. "Perks are nice, but employees are looking for something more basic," Levering and Moskowitz have noted. "They want to be told the truth, especially if the news is bad."
If you want employees to consider your company a great place to work, focus less on promoting financially oriented rewards and more on demonstrating the values that attracted them in the first place.
Labels: business, employees, integrity, leadership, management, trust, values
Bookmark this post on del.icio.usThen and Now: Local Reality TV
This is part of a series of posts featuring earlier content from the Vital Integrities Blog along with updated information and opinions.
Here's an excerpt from a March 2006 post:
Like weather forecasters who continuously miss the mark, TV journalists who pretend to be economic experts will lose credibility with their viewers. In the meantime, we're better off weathering this economic storm without them.
Here's an excerpt from a March 2006 post:
Weather forecasting, once an easy way to fill five minutes on a local news broadcast, is transforming the six o'clock news into reality TV. Network affiliates, which used to compete to be their area's preferred "news station," now market themselves as "weather stations." Meteorologists don't transmit from a studio anymore; they come to us "live from the weather center," conjuring up images of scientists sequestered away, scouring weather maps with military precision. And they no longer rely on simple radar; they now use Doppler. But not just your run-of-the-mill Doppler; it's now Super-Digital-Pinpoint-Triple-Bigfoot-Skytrak-Accu-Doppler. Unfortunately, the "reality" is forecasters still get it wrong at least 20 percent of the time.Amid the current recession, local television news shows have added economic reporting to their repertoire. And like their exaggerated weather prophesies, their forecasts for the economy are overly ominous. While we can't blame the media for creating our economic mess, we can fault television news for fostering a sense of doom and gloom. It's one thing for newscasters to report the latest unemployment figures or announce an area plant closing. But it's journalistically irresponsible to falsely state that we're in the worst economic period ever (does anyone else remember the double-digit mortgage rates of the 80s?), or to predict that a recovery is years away. Is it any surprise that consumers have stopped spending money?
Here's why this bothers me so much. I can accept that even the best forecasters will be wrong one out of five times. But TV stations are using weather to generate ratings, and ratings come from sensational stories. Meteorologists are "creating news" with their dire forecasts and reporting their grim predictions as fact. And, in today litigious society, we force people to react to those reports to avoid lawsuits if they don't. For instance, school systems must respond to heavy snow forecasts by keeping their buses off the roads, so that means closing schools. Local governments must deploy snowplows to await the storm on highway roadsides; otherwise, we won't blame the storm for traffic accidents, we'll blame the government for not being ready. News shows are pumping up their ratings at our financial expense.
Like weather forecasters who continuously miss the mark, TV journalists who pretend to be economic experts will lose credibility with their viewers. In the meantime, we're better off weathering this economic storm without them.
Labels: credibility, integrity, trust
Bookmark this post on del.icio.usHumble Pie
"I'm here on television saying I screwed up." Barak Obama
When news broke that Tom Daschle had failed to pay nearly $140,000 in back taxes, President Obama initially stood by his choice for Health and Human Services secretary. But Daschle was the President's second Cabinet nominee to be identified as a tax dodger, and political pundits everywhere began criticizing the appointment. After Daschle withdrew his name from consideration, the President admitted to reporters that he "screwed up" by defending Daschle when his tax problems were first discovered.
There's a lesson here for leaders who, like the President, are new to their current roles. Workshop participants often ask me for tips on earning the respect of a new staff. As it turns out, exhibiting humility is a good first step. Too many new managers believe that it's better to appear right than to be right. So rather than acknowledge their mistakes, they arrogantly discount them. But as the President demonstrated, the willingness to acknowledge an error can turn a leadership misstep into a credibility boost.
Leadership requires the courage to admit your blunders. By owning up to a mistake, you'll show workers that you're willing to risk your pride in order to do the right thing.
When news broke that Tom Daschle had failed to pay nearly $140,000 in back taxes, President Obama initially stood by his choice for Health and Human Services secretary. But Daschle was the President's second Cabinet nominee to be identified as a tax dodger, and political pundits everywhere began criticizing the appointment. After Daschle withdrew his name from consideration, the President admitted to reporters that he "screwed up" by defending Daschle when his tax problems were first discovered.
There's a lesson here for leaders who, like the President, are new to their current roles. Workshop participants often ask me for tips on earning the respect of a new staff. As it turns out, exhibiting humility is a good first step. Too many new managers believe that it's better to appear right than to be right. So rather than acknowledge their mistakes, they arrogantly discount them. But as the President demonstrated, the willingness to acknowledge an error can turn a leadership misstep into a credibility boost.
Leadership requires the courage to admit your blunders. By owning up to a mistake, you'll show workers that you're willing to risk your pride in order to do the right thing.
Labels: credibility, integrity, leadership
Bookmark this post on del.icio.usBusiness As Usual
There's recent news of yet another campaign marred by the misconduct of a greedy scoundrel using an influential position for personal financial gain. You might think I'm describing the latest shenanigans in Illinois politics. However, I'm actually referring to the most recent scandal at a United Way chapter.
In October, the United Way of Central Carolinas fired CEO Gloria Pace King amid donor outrage over her compensation package. King received pay and benefits totaling $1.2 million in 2007, reportedly making her the highest paid CEO of a United Way affiliate. While that amount is appalling in the nonprofit world, it's not by itself unethical. But an independent investigation revealed that King brazenly slipped past unsuspecting board members a revision to her pension plan that tripled its amount to $2.1 million. Public indignation has impacted the agency's annual fundraising campaign, with pledges falling by nearly 50 percent.
This is just another of a long list of scandals to hit United Way chapters in recent years. For example, in 2003 the controller of the Capital Area United Way in Lansing, Michigan pleaded guilty to embezzling $1.9 million to buy herself expensive show horses. A former CEO of New York City's United Way, a 33-year veteran of the organization, stole $227,000 during 2002 and 2003 to pay for personal expenses including dry cleaning, parking, and hotel stays. Then there was United Way of America president William Aramony, who was convicted of fraud, tax evasion, and conspiracy in 1995. Unfortunately, these are but a few cases of dishonesty at United Way.
After federal agents arrested Illinois governor Rod Blagojevich for attempting to auction off a Senate seat, many observers referred to his behavior as "business as usual" in that state's political establishment. It's as if we've come to expect political corruption in Illinois and that crooked politicians are merely living out a self-fulfilling prophecy. Could this same phenomenon be happening among leadership at United Way?
What do you think? Post a Comment
In October, the United Way of Central Carolinas fired CEO Gloria Pace King amid donor outrage over her compensation package. King received pay and benefits totaling $1.2 million in 2007, reportedly making her the highest paid CEO of a United Way affiliate. While that amount is appalling in the nonprofit world, it's not by itself unethical. But an independent investigation revealed that King brazenly slipped past unsuspecting board members a revision to her pension plan that tripled its amount to $2.1 million. Public indignation has impacted the agency's annual fundraising campaign, with pledges falling by nearly 50 percent.
This is just another of a long list of scandals to hit United Way chapters in recent years. For example, in 2003 the controller of the Capital Area United Way in Lansing, Michigan pleaded guilty to embezzling $1.9 million to buy herself expensive show horses. A former CEO of New York City's United Way, a 33-year veteran of the organization, stole $227,000 during 2002 and 2003 to pay for personal expenses including dry cleaning, parking, and hotel stays. Then there was United Way of America president William Aramony, who was convicted of fraud, tax evasion, and conspiracy in 1995. Unfortunately, these are but a few cases of dishonesty at United Way.
After federal agents arrested Illinois governor Rod Blagojevich for attempting to auction off a Senate seat, many observers referred to his behavior as "business as usual" in that state's political establishment. It's as if we've come to expect political corruption in Illinois and that crooked politicians are merely living out a self-fulfilling prophecy. Could this same phenomenon be happening among leadership at United Way?
Labels: integrity, leadership
Bookmark this post on del.icio.us
I won't give money to big non-profits for exactly this kind of thing. It's too easy to have no interest in the mission and focus, instead, on career and money. It's a very sad thing - as you said, appalling. And it's certainly not just the United Way.
I have chosen to give my money to organizations that have been created by the people running them. These small, new companies are excited to make change and the last thing they're thinking is how they're going to make money for themselves.
I have chosen to give my money to organizations that have been created by the people running them. These small, new companies are excited to make change and the last thing they're thinking is how they're going to make money for themselves.
What do you think? Post a Comment
Then and Now: A Fox in Charge of the Ethical Henhouse
This is the part of a series of posts featuring earlier content from the Vital Integrities Blog along with updated information and opinions.
Here's an excerpts from a March 2005 post:
Last week, First Marblehead rehired Meyers as chief executive, asserting that Meyers is the best person to lead the company out of its current financial crisis. Explaining the board's change of heart, a company spokesperson described Meyers' gift-giving transgression as a judgment lapse, rather than a policy violation.
Is First Marblehead's board putting financial results before ethics? Maybe. If the recent wave of corporate scandals has taught us anything, it's that a leader's lack of judgment is what causes ethical missteps and, eventually, financial meltdowns. When you already know a fox makes bad moral decisions, why give him a second chance to guard the hens?
Here's an excerpts from a March 2005 post:
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.A few months after that post, student-loan lender First Marblehead's board fired CEO Daniel Meyers for giving expensive gifts to a Bank of America executive. BofA was a major client of First Marblehead and Meyers appeared to be enticing one of its decision makers to send more business his way with a pricey watch and other lavish gifts totaling $32,000. Meyers claimed that he purchased the gifts with his own money; nevertheless, the board concluded at the time that he had violated a company ethics policy and sent him packing.
"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 credibility.
Last week, First Marblehead rehired Meyers as chief executive, asserting that Meyers is the best person to lead the company out of its current financial crisis. Explaining the board's change of heart, a company spokesperson described Meyers' gift-giving transgression as a judgment lapse, rather than a policy violation.
Is First Marblehead's board putting financial results before ethics? Maybe. If the recent wave of corporate scandals has taught us anything, it's that a leader's lack of judgment is what causes ethical missteps and, eventually, financial meltdowns. When you already know a fox makes bad moral decisions, why give him a second chance to guard the hens?
Labels: credibility, integrity, leadership, trust
Bookmark this post on del.icio.usStanding Up or Standing By?
With the onslaught of high-profile corporate scandals, it's hardly surprising to learn that business students anticipate encountering ethical dilemmas at work. What is shocking, and disappointing, is to hear them say that they're unlikely to stand up for their personal values when those circumstances arise.
In a survey conducted by the Aspen Institute Center for Business Education involving MBA students at fifteen prestigious business schools from around the world, 83 percent of respondents said they expect to find themselves in work situations in which their personal values clash with what they're asked to do. Alarmingly, only 45 percent of those students say they're very likely to object. To be sure, in too many organizations, normally conscientious employees allow unethical behavior to thrive.
Consider this example: In what the Wall Street Journal called the "biggest accounting scam ever," WorldCom had $11 billion in hidden costs and overstated profits and revenues. The Report of Investigation by the Special Investigative Committee of the Board of Directors of WorldCom explains that workers who knew better failed to object: "Employees who learned about improper corporate adjustments appear to have feared senior management's criticism or even the loss of their jobs."
Many recent corporate scandals were detectable, even avoidable, but workers ignored obvious signs of wrongdoing. Why? According to the Ethics Resource Center's 2003 National Business Ethics Survey, a big reason employees close their eyes to misconduct is the belief that management will avoid taking action anyway. The Aspen Institute's survey of future business leaders appears to validate that perception.
Hopefully, business schools are paying attention and will begin teaching their students the importance of confronting unethical behavior.
In a survey conducted by the Aspen Institute Center for Business Education involving MBA students at fifteen prestigious business schools from around the world, 83 percent of respondents said they expect to find themselves in work situations in which their personal values clash with what they're asked to do. Alarmingly, only 45 percent of those students say they're very likely to object. To be sure, in too many organizations, normally conscientious employees allow unethical behavior to thrive.
Consider this example: In what the Wall Street Journal called the "biggest accounting scam ever," WorldCom had $11 billion in hidden costs and overstated profits and revenues. The Report of Investigation by the Special Investigative Committee of the Board of Directors of WorldCom explains that workers who knew better failed to object: "Employees who learned about improper corporate adjustments appear to have feared senior management's criticism or even the loss of their jobs."
Many recent corporate scandals were detectable, even avoidable, but workers ignored obvious signs of wrongdoing. Why? According to the Ethics Resource Center's 2003 National Business Ethics Survey, a big reason employees close their eyes to misconduct is the belief that management will avoid taking action anyway. The Aspen Institute's survey of future business leaders appears to validate that perception.
Hopefully, business schools are paying attention and will begin teaching their students the importance of confronting unethical behavior.
Labels: integrity, leadership, values
Bookmark this post on del.icio.usLost Hero
On the day that Eliot Spitzer resigned as governor of New York, a group of traders watched his televised speech on the floor of the New York Stock Exchange. When he made his announcement, the traders cheered. The "sheriff of Wall Street," a moniker Spitzer earned by prosecuting corrupt corporate titans in his role as New York's attorney general, resigned in the wake of allegations of his involvement with a prostitute. The traders applauded what they considered a just comeuppance for the man who aggressively investigated their industry -- taking pleasure in the ironic fate of a prosecutor who accused countless Wall Street insiders of immoral behavior.
As someone who teaches the importance of leadership integrity, I considered Attorney General Spitzer a hero. He took on giant investment firms for driving up their clients' stock prices with bogus research reports, and for helping other clients engage in late trading and market timing. He exposed the shamefully high $190 million compensation package of former NYSE chair Richard Grasso. He uncovered wrongdoing at AIG, Marsh & McLennan, Citigroup, and Merrill Lynch -- just to name a few -- and he made those companies pay multi-million dollar fines for their actions. No wonder some people on Wall Street were happy to learn that the self-righteous Spitzer is not without his own moral shortcomings. I don't share their glee, because I've lost a hero.
Despite the good things that Spitzer did to clean up corporate culture in our country, I fear his legacy will now be that of just another leader who fails to live by the values he professes. Those who saw his efforts as a hindrance rather than heroic will continue to delight in his downfall. And some of us will be left searching for a new hero in the war against corporate corruption.
As someone who teaches the importance of leadership integrity, I considered Attorney General Spitzer a hero. He took on giant investment firms for driving up their clients' stock prices with bogus research reports, and for helping other clients engage in late trading and market timing. He exposed the shamefully high $190 million compensation package of former NYSE chair Richard Grasso. He uncovered wrongdoing at AIG, Marsh & McLennan, Citigroup, and Merrill Lynch -- just to name a few -- and he made those companies pay multi-million dollar fines for their actions. No wonder some people on Wall Street were happy to learn that the self-righteous Spitzer is not without his own moral shortcomings. I don't share their glee, because I've lost a hero.
Despite the good things that Spitzer did to clean up corporate culture in our country, I fear his legacy will now be that of just another leader who fails to live by the values he professes. Those who saw his efforts as a hindrance rather than heroic will continue to delight in his downfall. And some of us will be left searching for a new hero in the war against corporate corruption.
Labels: integrity, leadership
Bookmark this post on del.icio.usTeen Ethics
Here's sobering news for hiring managers: four out of ten teenagers believe that cheating, plagiarizing, lying, or behaving violently is sometimes necessary for their success. The fifth annual Junior Achievement/Deloitte Teen Ethics Survey polled U.S. teenagers ranging in ages from thirteen to eighteen about their ethical standards. Although 71 percent of respondents said they have what it takes to make ethical decisions once they enter the workforce, 38 percent said dishonesty and violence are acceptable as long as those behaviors help them succeed.
Consider these findings: More than half of the 24 percent of teenagers who said it's okay to cheat on a test listed a personal desire to succeed as suitable rationalization. Twenty-three percent said violence toward others can be justifiable when settling arguments or seeking revenge. And while 95 percent said stealing something from a store is dishonest, 47 percent found nothing wrong with downloading music from an online retailer without paying for it.
"As the teens of today become the workforce of tomorrow, it is more important than ever that they learn how to make appropriate, ethical decisions," says Gerald Czarnecki, president and chief executive officer of JA Worldwide. Indeed. Leaders I speak with are increasingly frustrated to discover that many young people entering the fulltime workforce lack the ability to recognize right from wrong. They find themselves having to teach workplace behaviors they think young adults should already know; that it's proper to call their supervisors when staying home sick, for instance, or that it's improper to text message their friends during staff meetings. But who's going to teach this stuff to our youth?
As it turns out, Junior Achievement and Deloitte will. The two organizations have collaborated to launch JA Business Ethics, a new program developed to help prepare high school students for making ethical decisions at work. The program's hands-on classroom activities and real-life applications allow students to compare their personal beliefs with accepted ethics theories. Additionally, Junior Achievement updated Excellence through Ethics, its free online program that provides ethical lessons for students in grades four through twelve. "Our society relies on its members having a clear understanding that integrity and trust are the foundation of all human relationships," explains Czarnecki. Thankfully, JA and Deloitte are helping to build that foundation.
Consider these findings: More than half of the 24 percent of teenagers who said it's okay to cheat on a test listed a personal desire to succeed as suitable rationalization. Twenty-three percent said violence toward others can be justifiable when settling arguments or seeking revenge. And while 95 percent said stealing something from a store is dishonest, 47 percent found nothing wrong with downloading music from an online retailer without paying for it.
"As the teens of today become the workforce of tomorrow, it is more important than ever that they learn how to make appropriate, ethical decisions," says Gerald Czarnecki, president and chief executive officer of JA Worldwide. Indeed. Leaders I speak with are increasingly frustrated to discover that many young people entering the fulltime workforce lack the ability to recognize right from wrong. They find themselves having to teach workplace behaviors they think young adults should already know; that it's proper to call their supervisors when staying home sick, for instance, or that it's improper to text message their friends during staff meetings. But who's going to teach this stuff to our youth?
As it turns out, Junior Achievement and Deloitte will. The two organizations have collaborated to launch JA Business Ethics, a new program developed to help prepare high school students for making ethical decisions at work. The program's hands-on classroom activities and real-life applications allow students to compare their personal beliefs with accepted ethics theories. Additionally, Junior Achievement updated Excellence through Ethics, its free online program that provides ethical lessons for students in grades four through twelve. "Our society relies on its members having a clear understanding that integrity and trust are the foundation of all human relationships," explains Czarnecki. Thankfully, JA and Deloitte are helping to build that foundation.
Labels: employees, hiring, integrity, values
Bookmark this post on del.icio.us10 Great Leadership Blunders: 2007
It's time to recognize the ten dumbest leadership moves of the year. In what has become an annual tradition (hey, it's the second year in a row!), I have compiled ten examples of leadership behavior certain to strip the offenders of any credibility while triggering an employee stampede to the door.
1. In March, consumer-electronics retailer Circuit City fired 3,400 salespeople who earned 51 cents more per hour than what management called the "market-based salary range for their role." The company intended to replace the overpaid employees with workers willing to work for less. Then, the company's sales tanked. Stock analysts blamed the slump on management's decision to fire its most experienced employees. So, in a move even more offensive than the firings, Circuit City asked those terminated employees to come back to work and help revive the company's sales. Perhaps the company should consider the sincerity of its slogan, "It's all about helping you."
2. Circuit City is the first company to earn two spots on the 10 Great Leadership Blunders list, and it's an honor the retailer rightfully earned. In December, the same leaders who fired frontline salespeople for earning 51 cents an hour too much, awarded millions in cash incentives to "key executives" who agreed not to quit. Top executives were offered between $600,000 and $1 million each for promising to remain with the company until 2011. The company said it established the incentives "to ensure the stability of the company's leadership team." What stability? Circuit City’s board should think about offering Philip Schoonover a cash incentive NOT to stay.
3. Managers at Catfish Bend Casino in Burlington, Iowa were livid when they discovered a "Dilbert" comic strip hanging on an office bulletin board. In the cartoon, Dilbert begins a conversation with another fictional character by asking, "Why does it seem as if most of the decisions in my workplace are made by drunken lemurs?" The offended managers reviewed surveillance tapes until they found footage showing security supervisor David Steward posting the strip, and they promptly fired him. Defending the termination in court, the company's HR director Steve Morley testified, "Basically, he was accusing the decision-makers of being drunken lemurs." The judge sided with Steward -- who said he was simply trying to cheer up coworkers worried about upcoming layoffs -- and ordered the casino to pay his unemployment benefits. As if describing the leadership mindset that led to Steward's firing, Dilbert's comic-strip friend answers his question by explaining, "Decisions are made by people who have time, not people who have talent."
4. It's impossible to compile a list of leadership blunders without including politicians. Two particularly bone-headed moves stood out in 2007. Senator Larry Craig of Idaho was arrested after making sexual advances toward another man in a Minneapolis airport bathroom. The other man was an undercover police officer. After his arrest, Craig announced he would relinquish his Senate seat; he later changed his mind and plans to serve out the remainder of his term. In Plant City, Florida, vice mayor Robert Brown apologized publicly to his wife for having an extramarital affair. Although it's not uncommon for politicians to openly beg forgiveness for their indiscretions, Brown's apology came during a city commissioners' meeting. "I apologize for my behavior and the hurt I caused," Brown told his wife of twenty-five years, who was sitting in the audience. He presented her with flowers and a kiss and then resumed the meeting.
5. Things have not gone well at British Petroleum over the past two years. In May 2005, an explosion at a Texas refinery killed fifteen people. A pair of Alaskan pipeline leaks in 2006 was attributed to the company's shoddy maintenance practices. And recent problems have delayed completion of an oil production platform in the Gulf of Mexico. Through it all, John Browne somehow managed to hang onto his job as CEO. But at last, BP's board found something to fire Browne for: having a four-year relationship with a male escort and lying about it to the High Court during his lawsuit against a London tabloid. Board chair Peter Sutherland said Browne "should be compelled by his sense of honor to resign in these painful circumstances." Note to Sutherland: there's nothing honorable about deadly explosions and environmental disasters.
6. For eight years, an anonymous contributor to Internet financial forums wrote scathing criticisms about natural-food grocer Wild Oats Markets. In hundreds of posts, the writer known only by the pseudonym "Rahodeb," claimed the retailer's shares were overpriced and questioned why anyone would own the stock. In February, rival Whole Foods Market announced its intention to buy Wild Oats. While considering the antitrust ramifications of the merger, the Federal Trade Commission uncovered Rahodeb's true identity: Whole Foods Market CEO John Mackey. Whole Foods officials deny that Mackey used his secret identity to drive down Wild Oats' stock price before he bought the company, but a skeptical FTC moved to block the merger. Perhaps Rahodeb's most pathetic post was his response to another discussion-board writer who unwittingly poked fun at Mackey's haircut. "I like Mackey's haircut," said Rahodeb. "I think he looks cute!"
7. In its Code of Conduct for event attendees, Madison Square Garden -- owner of the New York Knicks basketball team and the New York Rangers hockey team -- asks guests to "be respectful of others around them" and "refrain from using foul/offensive language." Apparently, the Code does not apply to the Garden's male employees. In October, a Federal District Court in Manhattan ordered the Garden and its parent company Cablevision to pay $11.6 million to a former executive who was fired after she reported obscenity-laced tirades and unwanted sexual advances by Knicks coach Isiah Thomas. Sixteen days later, the company settled another sexual-harassment lawsuit filed by a former Rangers cheerleading-squad captain. The headline of a New York Times article by Selena Roberts appropriately cautions: "The Garden Needs a Warning Label."
8. While his company's hedge funds crumbled and helped fuel a developing global credit crisis, Bear Stearns CEO James Cayne went golfing and played bridge, according to a Wall Street Journal investigation. The newspaper reported that during an especially critical ten-day period in July, Cayne was in Nashville playing in a bridge tournament -- without his cell phone. Even as the crisis worsened throughout the summer, Cayne knocked off work on Thursday afternoons and played golf every Friday, according to the Journal. Two of Bear Stearns Asset Management's hedge funds lost billions through investments in securities backed by subprime mortgages. Cayne, who denied the allegations, announced that he would forgo his 2007 bonus.
9. MIT students and faculty members were shocked to learn that their school had fallen several places in U.S. News & World Report’s annual ranking of colleges. Investigating MIT's drop from fourth to seventh place, the school newspaper discovered that officials had quietly fixed an "honest mistake" that inflated MIT's standings in previous years. Until this year, when calculating the average SAT scores of new students, MIT excluded the scores of foreign students. Non-native English-speaking students tend to score lower in reading on SAT tests than their American-born classmates, so omitting their scores overstated MIT's average and, thus, improved its standing in the magazine's report. It was the second scandal involving the MIT admissions department in 2007. In April, admissions dean Marilee Jones resigned after admitting she lied about her credentials when applying for a job at MIT twenty-eight years ago.
10. Before the New England Patriots went 16-0, they had to go to the woodshed. NFL officials discovered team leaders spying on New York Jets coaches during an early-season game, using a video camera to steal defensive signals from the Jets' sideline. Commissioner Roger Goodell fined Patriots head coach Bill Belichick $500,000. He also fined the team $250,000 and ordered owners to forgo this year's first-round draft choice. Critics say the Patriots' perfect season should be marked with an asterisk.
What do you think? Post a Comment
1. In March, consumer-electronics retailer Circuit City fired 3,400 salespeople who earned 51 cents more per hour than what management called the "market-based salary range for their role." The company intended to replace the overpaid employees with workers willing to work for less. Then, the company's sales tanked. Stock analysts blamed the slump on management's decision to fire its most experienced employees. So, in a move even more offensive than the firings, Circuit City asked those terminated employees to come back to work and help revive the company's sales. Perhaps the company should consider the sincerity of its slogan, "It's all about helping you."
2. Circuit City is the first company to earn two spots on the 10 Great Leadership Blunders list, and it's an honor the retailer rightfully earned. In December, the same leaders who fired frontline salespeople for earning 51 cents an hour too much, awarded millions in cash incentives to "key executives" who agreed not to quit. Top executives were offered between $600,000 and $1 million each for promising to remain with the company until 2011. The company said it established the incentives "to ensure the stability of the company's leadership team." What stability? Circuit City’s board should think about offering Philip Schoonover a cash incentive NOT to stay.
3. Managers at Catfish Bend Casino in Burlington, Iowa were livid when they discovered a "Dilbert" comic strip hanging on an office bulletin board. In the cartoon, Dilbert begins a conversation with another fictional character by asking, "Why does it seem as if most of the decisions in my workplace are made by drunken lemurs?" The offended managers reviewed surveillance tapes until they found footage showing security supervisor David Steward posting the strip, and they promptly fired him. Defending the termination in court, the company's HR director Steve Morley testified, "Basically, he was accusing the decision-makers of being drunken lemurs." The judge sided with Steward -- who said he was simply trying to cheer up coworkers worried about upcoming layoffs -- and ordered the casino to pay his unemployment benefits. As if describing the leadership mindset that led to Steward's firing, Dilbert's comic-strip friend answers his question by explaining, "Decisions are made by people who have time, not people who have talent."
4. It's impossible to compile a list of leadership blunders without including politicians. Two particularly bone-headed moves stood out in 2007. Senator Larry Craig of Idaho was arrested after making sexual advances toward another man in a Minneapolis airport bathroom. The other man was an undercover police officer. After his arrest, Craig announced he would relinquish his Senate seat; he later changed his mind and plans to serve out the remainder of his term. In Plant City, Florida, vice mayor Robert Brown apologized publicly to his wife for having an extramarital affair. Although it's not uncommon for politicians to openly beg forgiveness for their indiscretions, Brown's apology came during a city commissioners' meeting. "I apologize for my behavior and the hurt I caused," Brown told his wife of twenty-five years, who was sitting in the audience. He presented her with flowers and a kiss and then resumed the meeting.
5. Things have not gone well at British Petroleum over the past two years. In May 2005, an explosion at a Texas refinery killed fifteen people. A pair of Alaskan pipeline leaks in 2006 was attributed to the company's shoddy maintenance practices. And recent problems have delayed completion of an oil production platform in the Gulf of Mexico. Through it all, John Browne somehow managed to hang onto his job as CEO. But at last, BP's board found something to fire Browne for: having a four-year relationship with a male escort and lying about it to the High Court during his lawsuit against a London tabloid. Board chair Peter Sutherland said Browne "should be compelled by his sense of honor to resign in these painful circumstances." Note to Sutherland: there's nothing honorable about deadly explosions and environmental disasters.
6. For eight years, an anonymous contributor to Internet financial forums wrote scathing criticisms about natural-food grocer Wild Oats Markets. In hundreds of posts, the writer known only by the pseudonym "Rahodeb," claimed the retailer's shares were overpriced and questioned why anyone would own the stock. In February, rival Whole Foods Market announced its intention to buy Wild Oats. While considering the antitrust ramifications of the merger, the Federal Trade Commission uncovered Rahodeb's true identity: Whole Foods Market CEO John Mackey. Whole Foods officials deny that Mackey used his secret identity to drive down Wild Oats' stock price before he bought the company, but a skeptical FTC moved to block the merger. Perhaps Rahodeb's most pathetic post was his response to another discussion-board writer who unwittingly poked fun at Mackey's haircut. "I like Mackey's haircut," said Rahodeb. "I think he looks cute!"
7. In its Code of Conduct for event attendees, Madison Square Garden -- owner of the New York Knicks basketball team and the New York Rangers hockey team -- asks guests to "be respectful of others around them" and "refrain from using foul/offensive language." Apparently, the Code does not apply to the Garden's male employees. In October, a Federal District Court in Manhattan ordered the Garden and its parent company Cablevision to pay $11.6 million to a former executive who was fired after she reported obscenity-laced tirades and unwanted sexual advances by Knicks coach Isiah Thomas. Sixteen days later, the company settled another sexual-harassment lawsuit filed by a former Rangers cheerleading-squad captain. The headline of a New York Times article by Selena Roberts appropriately cautions: "The Garden Needs a Warning Label."
8. While his company's hedge funds crumbled and helped fuel a developing global credit crisis, Bear Stearns CEO James Cayne went golfing and played bridge, according to a Wall Street Journal investigation. The newspaper reported that during an especially critical ten-day period in July, Cayne was in Nashville playing in a bridge tournament -- without his cell phone. Even as the crisis worsened throughout the summer, Cayne knocked off work on Thursday afternoons and played golf every Friday, according to the Journal. Two of Bear Stearns Asset Management's hedge funds lost billions through investments in securities backed by subprime mortgages. Cayne, who denied the allegations, announced that he would forgo his 2007 bonus.
9. MIT students and faculty members were shocked to learn that their school had fallen several places in U.S. News & World Report’s annual ranking of colleges. Investigating MIT's drop from fourth to seventh place, the school newspaper discovered that officials had quietly fixed an "honest mistake" that inflated MIT's standings in previous years. Until this year, when calculating the average SAT scores of new students, MIT excluded the scores of foreign students. Non-native English-speaking students tend to score lower in reading on SAT tests than their American-born classmates, so omitting their scores overstated MIT's average and, thus, improved its standing in the magazine's report. It was the second scandal involving the MIT admissions department in 2007. In April, admissions dean Marilee Jones resigned after admitting she lied about her credentials when applying for a job at MIT twenty-eight years ago.
10. Before the New England Patriots went 16-0, they had to go to the woodshed. NFL officials discovered team leaders spying on New York Jets coaches during an early-season game, using a video camera to steal defensive signals from the Jets' sideline. Commissioner Roger Goodell fined Patriots head coach Bill Belichick $500,000. He also fined the team $250,000 and ordered owners to forgo this year's first-round draft choice. Critics say the Patriots' perfect season should be marked with an asterisk.
Labels: credibility, integrity, leadership, trust, values
Bookmark this post on del.icio.us
I hope your list is in order. The Circuit City debacle was amazing to me. For years I've shopped there rather than Best Buy because Circuit City's employees were head and shoulders above Best Buy's. I could go there to ask questions and be confident I would get a thoughtful answer. No more. So now I have two bad choices in the big box electronics field.
Who knows where to download XRumer 5.0 Palladium?
Help, please. All recommend this program to effectively advertise on the Internet, this is the best program!
Help, please. All recommend this program to effectively advertise on the Internet, this is the best program!
It never ceases to amaze me how many CEOs are prepared to wreck the ship on the rocks, just to prove they are the captain.
What do you think? Post a Comment
Hey, you don't suppose they really are our greatest assets, do you?
Remember last March, when Circuit City fired 3,400 salespeople with the intention of replacing them with lower-paid workers? As it turns out, that wasn't a very good business strategy. The consumer-electronics retailer has struggled ever since and senior officials are expecting the company to lose money this year. This week, analysts downgraded Circuit City's stock and blamed the company's weakened sales performance on management's decision to fire its most experienced employees.
Now, in an act even more impudent than the March firings, Circuit City is asking those former employees to come back and help revive the company's sales. Circuit City spokesperson Bill Cimino told Reuters, "In a lot of cases, we've completely changed how our stores operate. We've got a better career path now for associates."
I don't know how many workers aspire to a path where the company fires you to save 51 cents an hour and then, with its back against the wall, asks you to forgive and forget the eight-month interruption they imposed in your career. As one analyst put it, at Circuit City, "execution remains a significant concern."
Now, in an act even more impudent than the March firings, Circuit City is asking those former employees to come back and help revive the company's sales. Circuit City spokesperson Bill Cimino told Reuters, "In a lot of cases, we've completely changed how our stores operate. We've got a better career path now for associates."
I don't know how many workers aspire to a path where the company fires you to save 51 cents an hour and then, with its back against the wall, asks you to forgive and forget the eight-month interruption they imposed in your career. As one analyst put it, at Circuit City, "execution remains a significant concern."
Labels: credibility, integrity, values
Bookmark this post on del.icio.usAdmissions of Wrongdoing
Students and faculty at MIT were surprised when their school dropped several places in U.S. News & World Report's annual ranking of colleges. MIT fell from a three-way tie for fourth to seventh place. Only after questioning from MIT's student newspaper did college admissions officials explain the drop. Until this year, when calculating the average SAT scores of new students, MIT had been excluding the scores of foreign students; since non-native English-speaking students tend to score lower in reading on SAT tests than their American-born classmates, omitting their scores inflated MIT's average and, thus, improved its standing in the magazine's report.
"We were not at all trying to do this in any way to increase our rankings," says interim admissions dean Stuart Schmill. He said it was an honest mistake uncovered during a database software change. But wait. There's a reason MIT has an INTERIM admissions director: this isn't the first scandal involving the MIT admissions department this year.
In April, Marilee Jones resigned her position as dean of admissions after admitting she lied about her credentials when applying for a job at MIT twenty-eight years ago. Jones falsely claimed to hold degrees from Albany Medical College, Rensselaer Polytechnic Institute, and Union College. At the time, MIT Chancellor Phil Clay said, "It represents a very long deception when there were opportunities to correct the record. This is not a mistake or an oversight."
So, if Jones had no qualms about fabricating a few degrees on her resume, is it a stretch to imagine she had been purposely fudging the numbers submitted to U.S. News & World Report every year?
"We were not at all trying to do this in any way to increase our rankings," says interim admissions dean Stuart Schmill. He said it was an honest mistake uncovered during a database software change. But wait. There's a reason MIT has an INTERIM admissions director: this isn't the first scandal involving the MIT admissions department this year.
In April, Marilee Jones resigned her position as dean of admissions after admitting she lied about her credentials when applying for a job at MIT twenty-eight years ago. Jones falsely claimed to hold degrees from Albany Medical College, Rensselaer Polytechnic Institute, and Union College. At the time, MIT Chancellor Phil Clay said, "It represents a very long deception when there were opportunities to correct the record. This is not a mistake or an oversight."
So, if Jones had no qualms about fabricating a few degrees on her resume, is it a stretch to imagine she had been purposely fudging the numbers submitted to U.S. News & World Report every year?
Labels: credibility, integrity
Bookmark this post on del.icio.usDo Goals Corrupt?
Dell Inc. announced yesterday that it will restate more than four years of financial results after a yearlong internal investigation discovered "errors and irregularities" in its accounting and reporting practices. During that period, Dell's finance department manipulated its earnings in order to meet Wall Street's quarterly expectations. What, you might wonder, would compel the computer maker's accounting team to fudge the company's numbers?
"People cheat," says Wharton School of Business professor Maurice Schweitzer in an article for Knowledge@Wharton. And, he adds, people with goals that they fail to meet are more likely to cheat than those people simply instructed to try their best.
Schweitzer and colleagues Lisa Ordonez and Bambi Douma conducted an experiment to study the relationship between goals and cheating. The researchers gave three groups of college students sixty seconds to form as many words as possible out of seven jumbled letters. They told one group to "do your best to create as many words as possible." They gave another group a goal of creating at least nine words in each round and offered participants $2 for each time they met the goal. They gave a third group the same nine-word target, but without the financial incentive. Participants kept and reported their own scores, which made it easy for subjects to cheat.
Schweitzer and his partners analyzed the behavior of participants who falsely claimed to have met the goal of forming nine words. They found that participants who had a goal and failed to meet it were more likely to cheat than those without a specific target were. Schweitzer and company also noticed that people who missed their goal by one or two words were more likely to cheat than people who came up several words short. And contrary to the researchers' expectations, participants with unmet goals were just as likely to cheat whether or not there was a financial incentive at stake.
Are Dell's accountants bad people, or did the pressure to meet goals encourage their unethical behavior? I think Erica Ogg of CNET News.com answers that question best in her article "Goals led Dell to cook the books." Writes Ogg: "Dell felt so pressured to meet Wall Street expectations that its finance department bent accounting rules to make up for shortfalls in certain quarters and underreported earnings results in others, each time ensuring that Dell seemed to hit earnings targets that financial analysts were expecting."
"People cheat," says Wharton School of Business professor Maurice Schweitzer in an article for Knowledge@Wharton. And, he adds, people with goals that they fail to meet are more likely to cheat than those people simply instructed to try their best.
Schweitzer and colleagues Lisa Ordonez and Bambi Douma conducted an experiment to study the relationship between goals and cheating. The researchers gave three groups of college students sixty seconds to form as many words as possible out of seven jumbled letters. They told one group to "do your best to create as many words as possible." They gave another group a goal of creating at least nine words in each round and offered participants $2 for each time they met the goal. They gave a third group the same nine-word target, but without the financial incentive. Participants kept and reported their own scores, which made it easy for subjects to cheat.
Schweitzer and his partners analyzed the behavior of participants who falsely claimed to have met the goal of forming nine words. They found that participants who had a goal and failed to meet it were more likely to cheat than those without a specific target were. Schweitzer and company also noticed that people who missed their goal by one or two words were more likely to cheat than people who came up several words short. And contrary to the researchers' expectations, participants with unmet goals were just as likely to cheat whether or not there was a financial incentive at stake.
Are Dell's accountants bad people, or did the pressure to meet goals encourage their unethical behavior? I think Erica Ogg of CNET News.com answers that question best in her article "Goals led Dell to cook the books." Writes Ogg: "Dell felt so pressured to meet Wall Street expectations that its finance department bent accounting rules to make up for shortfalls in certain quarters and underreported earnings results in others, each time ensuring that Dell seemed to hit earnings targets that financial analysts were expecting."
Labels: credibility, integrity, trust
Bookmark this post on del.icio.usLearning How To Cheat
"Duke University is a community of scholars and learners, committed to the principles of honesty, trustworthiness, fairness, and respect for others. Students share with faculty and staff the responsibility for promoting a climate of integrity. As citizens of this community, students are expected to adhere to these fundamental values all times, in both their academic and non-academic endeavors." -The Fuqua School of Business Honor Code
The honor code at Duke University's Fuqua School of Business hangs in every classroom, serving as a constant reminder to students of the college's core values. What's more, all prospective students receive a written copy of the code and, before gaining acceptance to the prestigious school, must agree in writing to abide by it. Why so much emphasis on a values statement? "Fuqua depends on every member of its community to uphold the code in both spirit and action," says Dean Douglas Breeden. Sounds good, right?
Maybe it's not good enough. There's news this week that officials at Fuqua caught thirty-four first-year MBA students cheating. A professor noticed suspicious similarities in students' answers to questions on a take-home exam. An investigation revealed that the students collaborated on the test in violation of the professor's instructions. All but four students in the class of thirty-eight participated in the cheating.
Although it may be the largest incident of college dishonesty, Duke's is not an isolated episode. In a survey published last year in Academy of Management Learning & Education, 56 percent of graduate business students acknowledged that they have cheated. Donald McCabe, a Rutgers professor who worked on the survey, says students are quick to blame their cheating on the post-Enron business environment. "They'll argue that they're just emulating the behavior they're seeing in the corporate world," he says. "They're acquiring a skill that will serve them well when they're out there."
So is college cheating just one more consequence of the corruption involving companies like Enron, Arthur Anderson, Global Crossing, WorldCom, and Tyco?
The honor code at Duke University's Fuqua School of Business hangs in every classroom, serving as a constant reminder to students of the college's core values. What's more, all prospective students receive a written copy of the code and, before gaining acceptance to the prestigious school, must agree in writing to abide by it. Why so much emphasis on a values statement? "Fuqua depends on every member of its community to uphold the code in both spirit and action," says Dean Douglas Breeden. Sounds good, right?
Maybe it's not good enough. There's news this week that officials at Fuqua caught thirty-four first-year MBA students cheating. A professor noticed suspicious similarities in students' answers to questions on a take-home exam. An investigation revealed that the students collaborated on the test in violation of the professor's instructions. All but four students in the class of thirty-eight participated in the cheating.
Although it may be the largest incident of college dishonesty, Duke's is not an isolated episode. In a survey published last year in Academy of Management Learning & Education, 56 percent of graduate business students acknowledged that they have cheated. Donald McCabe, a Rutgers professor who worked on the survey, says students are quick to blame their cheating on the post-Enron business environment. "They'll argue that they're just emulating the behavior they're seeing in the corporate world," he says. "They're acquiring a skill that will serve them well when they're out there."
So is college cheating just one more consequence of the corruption involving companies like Enron, Arthur Anderson, Global Crossing, WorldCom, and Tyco?
Labels: integrity, trust, values
Bookmark this post on del.icio.us51 Cents
Circuit City announced last week the firing of 3,400 sales associates who the company considered overpaid. According to The Baltimore Sun, the terminated salespeople earned 51 cents more per hour than what the company called the "market-based salary range for their role." To complete the repulsive act that company officials labeled a "wage management initiative," the electronics retailer said it would replace the fired salespeople with lower-paid workers.
There's no better example of an organization violating its values than this action by Circuit City. On its Web site, the company's list of values includes the following statements:
What do you think? Post a Comment
There's no better example of an organization violating its values than this action by Circuit City. On its Web site, the company's list of values includes the following statements:
Our associates are our greatest assets. What former, current, or future associate could ever believe this statement knowing that management fires those "greatest assets" making 51 cents an hour too much?Consistency between an organization's stated values and its leaders' actual behavior is critical to credibility. With such discrepancy between what its leaders say and what they do, Circuit City employees will immediately and rightly recognize their leaders as frauds.
What's in it for you? We foster an environment of engagement where associates are invested and involved in the future of the company. What's "in it" for the associates is the hourly wage that the company offered them when they joined up -- that is, when they invested their efforts into Circuit City.
Our integrity must never be compromised. Too late! Management has destroyed its integrity with the company's employees forever.
Labels: credibility, integrity, values
Bookmark this post on del.icio.us
The honcho's at Circuit City could care less about what their employees think. Values? Nothing but a word to these pompous asses. Look at the other words that are so cleverly and flippantly thrown around business today:
Oh yes Mr./Ms. employee, we would like your "buy-in" to our new program. Today "buy-in" is an overused codeword for jamming something down your throat.
And we would certainly like you to take "ownership" of your job, department, etc. Another codeword for "Think like us (and work a lot harder) - but you'll never participate in the executive stock option plan."
And who will "Champion" this project? Meaning who will get stuck with it and have to work late and come in this weekend.
Cheap words! Consider the source.
Oh yes Mr./Ms. employee, we would like your "buy-in" to our new program. Today "buy-in" is an overused codeword for jamming something down your throat.
And we would certainly like you to take "ownership" of your job, department, etc. Another codeword for "Think like us (and work a lot harder) - but you'll never participate in the executive stock option plan."
And who will "Champion" this project? Meaning who will get stuck with it and have to work late and come in this weekend.
Cheap words! Consider the source.
What do you think? Post a Comment
Author George Brymer's comments about the leaders who get it, and those who never will.
