In the rush to and sheer scope of stabilizing first the financial system, and then key institutions in the financial system, and now jump-starting the U.S. economy, is the United States in danger of not correcting one other possible operational flaw?
One wise and successful CEO told yours truly that the nation might very well be doing just that. Full disclosure: the CEO is a friend of mine.
It starts at the top
The source problem: CEOs, the CEO said. In less than a decade, for reasons which are probably complex, the United States has produced a stunning array of CEOs whose actions have been, at minimum, selfish and unethical, and even fraudulent and illegal.
Now, in the context of a post-September 11 geopolitical world, the senior management flaws would appear to be minor. But from an American standpoint, certainly from a Protestant work ethic standpoint -- the genesis of the American system -- the errors/lapses have been gargantuan.
Of course, there are those who will counter "why is the accuser signaling-out just CEOs, when many others are responsible, also?" To that, my CEO friend counters with, true, some organizations are collaboratively managed, but the bulk are decidedly top-down organizations that follow the "all fall down" model. Basically, everybody falls in line, and no one offers any serious criticisms or challenges. Hence, he says, the person at the top is the key because he or she sets the tone.
And what a tone it has been in this decade, my CEO friend continued. The most distinguishing characteristic of an alarming number of CEOs this decade will be that they'll end their careers with $20 million or $10 million more than when they started. In some cases, it's just a few hundred thousand dollars more. Everything else from an operational and social standpoint -- and in some cases, from a stockholders' equity standpoint -- has been sacrificed.
Where did these individuals come from? How did these unethical, sterile, destructive, valueless, self-serving adults come to lead some of the nation's largest corporations, he asks. Or lead anything, for that matter?
Corporate/Economic Analysis: This is the same nation that produced John Wooden and the creed he lived daily. The CEO above makes the case that as the nation evaluates weak points during the decade of descent and policy errors, we can't forget to start at the top. The view from view argues he has point, and it's worthy of investigation, study, and reform.
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Financial Editor Joseph Lazzaro is based in New York.
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Reader Comments (Page 1 of 1)
1-12-2009 @ 9:32AM
BHarrison said...
Quote from article: "Of course, there are those who will counter "why is the accuser signaling-out just CEOs, when many others are responsible, also?"
CEOs are like captains of a ship, they are 100% responsible for the corporations that they are paid TENS and HUNDREDS of MILLIONS of dollars in salaries and compensations to "manage". Otherwise, what ARE they being paid those exorbitant compensations for?
The CEOs want the compensations WITHOUT BEING HELD RESPONSIBLE for what happens "under their watch and stewardships". This simply cannot be rationalized legitimately by anyone.
Those CEOs who oversaw the orchestration and perpetuation of pyramid and Ponzi type schemes and other blatant FRAUDS should be indicted and prosecuted the same as Madoff. There is little, if any, difference between what has happened with the "derivatives", etc.
Many FIs and corporations have made blatant and flagrant misrepresentations of the actual book and/or market values of what they were selling to investors. "Off-the-books" stocks and/or financial instruments represent nothing less than premeditated FRAUD.
It is past time for the salaries, bonuses, and "other compensations" to be substantially adjusted downward to be commensurate with the real value of the performance and achievements of the CEOs, who are nothing more than corporate management "employees".
As shown by the reality of what has happened, none of the CEOs of our major FIs and corporations have demonstrated that they were, in anyway, "worth" the salaries and compensations that they were paid . . . these CEOs "led the parade" to the economic demise and debalce that we are now experiencing.