Yet another example of corporate wrongdoing, reported in the Daily Telegraph today — the former CFO of Boeing is to plead guilty to a criminal charge that could land him a fine of $250,000 and up to five years in jail.
- Full Story: Telegraph / Money / Ex-chief at Boeing to plead guilty (registration required)
What is it with some officers of large publicly-held corporations? Enron, Worldcom, Martha Stewart in the US; Ahold in The Netherlands; Parmalat in Italy… It’s almost a never-ending litany of tales of personal greed and to hell with anyone else. Did you see Enron’s Ken Lay speaking on CNN a few weeks ago? It was all someone else’s fault, according to Lay. He was just the CEO and didn’t know what was happening!
It does amaze me that these stories keep emerging at a time when the focus on an organization?s ethical behavior has never been greater, what with Sarbanes-Oxley in the US and growing attention in Europe by EU legislators. What might have been broadly tolerable in the past is no longer so (if it ever was), and the potential consequences of unacceptable corporate behavior are far greater, as we see with stories such as these, not only for the individuals concerned but also for the many other stakeholders who are directly affected as a result of the bad guys’ actions.
In continental Europe, particularly in the western part, many countries have long upheld corporate governance as a visible yardstick for corporate ethics, with publicly-communicated policies governing acceptable behavior. Defined corporate structures with accountable oversight by supervisory boards — mandated by local laws — is a common method of demonstrating adherence to such policies, lessening the risks of questionable actions by maverick individuals or whole managements.
Europe is no Garden of Eden in this regard, though. As business continues to globalize and become ever more competitive, grabbing more market share or selling more products or services means the risks of ethical failure in doing so are ever present. This is especially so where such activities are focused in developing countries where cultural and business practices differ and competition is often very tough.
From the communicator?s point of view, a major challenge is one of continually educating stakeholders that ethical behavior equates to customer interest, where such behavior has a direct relationship with the organization?s financial health and overall reputation. Indeed, reputation (sullied or unsullied) is the bottom line for corporate governance.
End of rant – at least, for the moment.