Integrity, Trust, Duty, Honor, not just words!

During Mr. Greenspan’s testimony before congress a couple of weeks ago he acknowledged that he had made one mistake.



He had assumed that the corporate “Elite” in charge of governance of our corporations, would behave with integrity and fulfill their duties with the honor deserving of the trust the rest of us, including himself, had invested in those who held the highest of corporate offices.

We can discuss the problem of using the word “assume” for ever but as we all know many people interpret it to mean “assume makes an ass of u and me” which is of course exactly what has happened.

However, the discussion here is whether Mr. Greenspan had good reasons to make the assumption about integrity when he did or not.

Around the 1980’s, the Foreign Corrupt Practices Act and its requirements for compliance forced corporations to clean up their “act” in terms of ethics and code of conduct.

Since then a new wave of other management techniques, mainly to cope with a myriad of social legislation (e.g. equal opportunity, diversity, sexual harassment, etc.) gave birth to the Vision, Mission, and Code of Conduct statements which turned up on a mostly voluntary basis in the more forward looking organizations.

It took until the post Enron/Worldcom era Sarbanes Oxly (SOX) legislation to make having these Vision, Mission and Ethics/Code of Conduct statements almost compulsory as evidence of the “tone at the top”

The problem with all these expressions of desired behavior was that they were just that, expressions of desired behavior. Agreed many companies trained their employees with lengthy and numerous training sessions, and management was encouraged to give these statements endless lip service, but with some minor exceptions nothing really changed especially not in the top echelon of the corporation. Top management rarely walked the talk.

Evidence the continued raping of the corporations and by default the shareholders with outrageous executive compensation, the blatant cheating by secretly backdating options, the petty thefts committed by executives on expense reports which ensured that hardly any private expense of the executive remained unpaid by claiming it as an entitlement or fringe benefit.

The reason why most people in high offices behave this way is because being in a high and powerful office is a new experience to them. Even though there are guidelines of how to behave with integrity and honor, it is not part of their DNA. There is no “noblesse oblige” mentality in their make up. They have worked hard to get to a position that they had no reasonable expectation to get to so they are “worth it”, they deserve everything they can get. It is difficult to deal with power responsibly if you have never been close to it or have never personally experienced it before.

Many fresh new executives have had no role model, no father who was in a high level position of power, whom they could have learned from at an early age, who they saw agonizing over difficult decisions he had to make which had major implications for a community, what it was like to be responsible for a large number of people, other than his immediate family’s, lively hood, how they had to be an example in their community and had to continue to earn their trust and confidence and so on.

Being taught by ones parents how to behave and conduct oneself in a position of power vis a vis ones servants thus learning how to treat them with respect, dignity and care is another example of learning at an early age that power demands duty and a sense of responsibility.

These are all things that shape an individual leader’s DNA. Admittedly it sounds like the preaching’s of an old era that is outdated and cannot work in a meritocracy. Therefore to assume that “noblesse oblige” is the M. O. in every high level executive is an unreasonable expectation. To expect that the ethics and self governance in the highest offices of the land are a substitute for sensible regulation and legislation is naïve and old fashioned to say the least. In this modern world omissions of a sense of duty and responsibility in some individuals can have global implications on the lives of millions of people.

Business is not just Business, it goes beyond the egotistical compensation and self help interests of the executives. Business is a serious undertaking; it carries with it responsibilities and duties to a broader community, it affects other peoples livelihoods and not only just those that work for the business, it affects whole communities, and as we have recently discovered, it affects the entire world.

It is time top management took the words seriously.