Today's New York Times includes a report by Floyd Norris on a paper that links a CEO's off-the-job rule-flouting behavior with an increase in the likelihood that the CEO's company is going to have to restate earnings or that it might engage in fraud.
I'm looking forward to reading the paper. My gut tells me that people who routinely break some rules make it easier for them to break others (a la classic cognitive dissonance theory). It's not a huge leap from that conclusion to the conclusion that people who report to rule-flouting CEOs will likewise be tempted to bend the rules.
Friday, July 26, 2013
Saturday, July 6, 2013
I loved James B. Stewart's story in today's New York Times (Boss's Remark, Employee's Deed and Moral Quandary). When one is a boss, one needs to be painfully aware of how even the most tossed-aside comment will sound to an employee. My favorite part of the story:
No one asserts that Mr. Corzine told Ms. O’Brien to take customer money. Mr. Corzine’s lawyer, Andrew J. Levander, said Mr. Corzine was told the night before that the firm had $82 million in cash and another $602 million in unencumbered securities, and “it never dawned on him” that Ms. O’Brien or anyone else might “violate the golden rule” about safeguarding customer assets.
But how would Ms. O’Brien have interpreted Mr. Corzine’s comment? When I discussed this with John Hasnas, director of the Georgetown Institute for the Study of Markets and Ethics, he drew an analogy to the murder of Thomas Becket, archbishop of Canterbury, after Henry II is said to have uttered, “Will no one rid me of this troublesome priest?”
“He didn’t actually tell anyone to murder the archbishop,” Professor Hasnas noted. “But people knew what would make him happy.” Indeed, history records that four of Henry’s courtiers promptly set off and dispatched the archbishop in the nave of Canterbury Cathedral.
Yep. And do I believe that Corzine's request added a silent "legally, of course" kicker? Not for a minute.