June 2008 Archive
June 2, 2008
In the June issue of Portfolio, a Conde Nast monthly magazine, the Editors ask in an article called "The Age of Attack" whether we are at a tipping point of "our corporate culture where civil discourse-politesse about our professional peers- is about to be come defunct?" The Editorial gives the examples of Jack Welch severely criticizing Jeff Immelt his successor at GE and Paul Volcker, the former Chairman of the Federal Reserve making very negative comments on Ben Bernanke, the current Chairman. According to the Editors of Portfolio there has always been a "code that you don't beat up on the person who takes over from you."
The same question could be asked about our political culture. The presidential political campaign has provided numerous examples of loss of civility when instead of debating issues and ideas, candidates attack each other viciously and question the character of their opponent.
There is room in the public discourse for criticism, but it should never be an attack. A criticism should never be destructive. A criticism of a particular action should be accompanied with positive suggestions.
The etymology of the word "civility" comes from the Latin Civilis which means proper to a citizen. The word citizen comes from the word city. Civility is how one should behave in the "City" or in a close proximity with other people, such as neighbors, co-workers or any other person we come in contact with.
Civility can also be understood as a form of respect and tolerance for others.
Why is civility important? One could argue that without civility, ultimately we would not have a civilization. Without some respect and tolerance for others we would be facing violence and chaos and ultimately destruction of Society. After all, the antonym to civilization is barbarism!
What makes us lose our sense of civility in our actions?
They may be more than one explanation but I imagine that the root lies in our human nature that is essentially selfish. We should try to remember the biblical directive to love our neighbor as ourselves. (Leviticus 19:18)
Jane Adams, the U.S. social worker, sociologist, & suffragist wrote:
Civilization is a method of living, an attitude of equal respect for all men.
June 9, 2008
Ethics and Blogs:
Last week I was invited by the Central Pennsylvania chapter of PRSA in Harrisburg to speak about ethics and blogs. The session was video taped and will be posted on their website shortly.
My co-presenter Brian Shoff is a known blogger. It was encouraging to discover that he and many other bloggers are concerned about ethics.
Last year, the Pew Internet & American Life Project estimated that there are some 12 million bloggers in the U.S. Some bloggers have been debating whether the Weblog community should follow specific ethical guidelines. Responsible bloggers recognize that they are addressing the public and have some ethical obligations to society in general. CyberJournalist.net has created a model "Bloggers code of ethics." Although all bloggers are not journalists, many believe that they should follow more or less the ethics code followed by journalists.
Libel and defamation is a critical issue for bloggers. According to the Media Law Center, there are approximately 150 lawsuits in the US against bloggers. Most of the lawsuits claim defamation and libel. However, only six of these lawsuits have resulted in penalties for the bloggers. Most of the cases have been dismissed by the anti-SLAPP (Strategic Lawsuit Against Public Participation) laws. These laws protect from litigations whose only purpose is to intimidate a critic by the threat and cost of a lawsuit.
Last year, Andrew Left, a blogger, posted negative information on his blog, about GTX Global Corp .,a provider of IP multimedia technologies. GTX claimed that his intent was to depress the stock price of the company so that he could make a profit by short selling the stock. GTX Global sued Andrew Left for defamation and securities fraud but the court dismissed the lawsuit under the anti-SLAPP laws.
Neville Hobson, a leading influencer in social media communications gives good advice for corporate bloggers:
"If an organization isn't already in place where openness and transparency in communication exists and is practiced, then using tools like blogs will be unlikely to do anything positive for the organization. If your openness/transparency foundation isn't there, don't blog."
I believe we have those foundations at Ruder Finn!
June 16, 2008
I participated in an Ethics and Compliance Officer Association conference in Scottsdale, Arizona last month and attended a fascinating session called The Causes of Corporate Corruption: On the panel, brilliantly moderated by Jeff Benjamin, the ethics officer for Novartis, was David Myers, the former Controller at WorldCom, David Anders, the former Federal prosecutor of WorldCom and Evan Chester a white-color crime attorney. The session lasted 3 hours and was fascinating.
David Myers, who went to jail for his role in the WorldCom scandal, told his side of story. As controller he was first asked by the Scott Sulivan, the CFO, back in October 2000, to enter an amount in the reserve for which there was no validation. He first refused and so did the people who worked for him. He was then approached by Bernie Ebbers, the then Chairman and CEO in a very friendly manner. Mr. Ebbers told him that he sympathized with his situation and that he should not be asking him to do anything that made him uncomfortable. However, he promised, this would be the one and only time such a demand was made, and based on the financial projections of the company, this "error" would be corrected in the next Quarter. David Myers believed him. He also knew that if he refused to make the entry he would, most likely, lose his job and would be unable to meet his financial commitments such as his mortgage payment and college tuition for his children. After much hesitation he entered the amount in the company's reserve. Predictably, the same request was made for the following Quarters until it was discovered in 2002 and the whole scandal broke out.
On June 25, 2002, WorldCom announced financial restatements for 2001 and the first Quarter of 2002 for the amount to $3.85 billion. The stock (which had traded at an all-time high at $62) closed under $1. The company went bankrupt a month later. Scott Sulivan and David Myers each entered a guilty plea. Scott served 5 years and David 1 year and one day. Bernie Ebbers is serving a 25-years sentence.
Once David Myers had made that "one and only" fraudulent entry, it would have been extremely hard for him to refuse to make the second one because he could never justify making the first one.
A slippery slope is, by definition, irreversible.
What lessons can we learn from the WorldCom debacle and how can we identify a situation that could become a slippery slope?
That will be the topic of my next blog.
June 23, 2008
What lessons can we learn from the WorldCom debacle or how can we identify a situation that could become a slippery slope? (see last week's entry)
The concept of a slippery slope asserts that a minor violation or infraction to a moral code or the law will gradually lead to more serious offences that ultimately can culminate in very serious consequences. Some people believe that the slippery slope concept is a fallacy that certain events will not inevitably lead to other events. However, human psychology and experience allow us to consider it seriously.
The concept of the slippery slope is also one linked to the understanding of conscience.
I remember the story of a man who was driving very late at night in a remote area. He accidentally hit a pedestrian. Seeing no one around, without any hesitation he just took off. He was later caught (or turned himself in) and did jail time. He now speaks in public about his experience and makes the point that it was because of the many prior minor violations of his values and conscience that he did not even hesitate before taking off.
How can we identify and avoid a slippery slope situation?
1. The mere fact that we ask ourselves that question is an important step. Being aware that we may be faced with such a situation might protect us.
2. We should exercise caution remembering that the first step is the most critical.
3. We should resist the temptation to cut corners and take risks even when the pressure of the work environment presses us to do so.
4. We should learn from the experience of others. If it happened to them, it can happen to anyone of us.
5. We should get advice from a respected counselor or even colleagues whether the step we contemplate taking could lead to a slippery slope situation.
6. We should be willing to exercise morale courage.
I am sure that David Myers, of WorldCom, with 20-20 hindsight, would agree. He told the judge, at his sentencing: "At the time I consider to be the single most critical character-defining moment of my life, I failed."
As Michael Josephson, of the Josephson Institute said:
"Moral courage is a body-guard to conscience and character."
June 30, 2008
The New York Times, in its June 23rd issue, tells the incredible story of Mr. Biggs, a Manhattan prosecutor. He was in charge of prosecuting two men accused of the murder of a bouncer at the Palladium night club. However, he decided to help the defense because he believed that the two men were innocent. They are now both free.
He informed his superiors that he had serious doubt about the men's culpability and thought that the case should be dropped. Nevertheless, he was instructed (or pressured) to prosecute the case anyway.
However he also helped the defense by tracking down reluctant witnesses, preparing them to testify for the defense and coaching the defense lawyers. "I did the best I could," he said, "to lose."
Mr. Bibbs had a conflict between his conscience and his obligation to his superiors.
Some say that if he really believed the men were innocent he should not have prosecuted them. Daniel Castleman, chief assistant district attorney said: "Nobody in this office is ever required to prosecute someone they believe is innocent." However Mr. Bibb believed that if he had resigned the case, another prosecutor would have been successful in convicting them.
Idealistically both the prosecution and the defense should search the truth and serve justice, but in reality it is often about winning.
We may all be faced with a dilemma where our conscience is in conflict with our obligations. How can we resolve such a conflict?
Here are some suggestions that might help.
1. We should make sure that our "conscience" is well informed. We should have as much facts as possible before making any determination. Even then, we should consider the possibility that we could be wrong.
2. We should consult with someone that we trust and that is independent.
3. We should think of possible alternative solutions that could satisfy both our conscience and our obligation.
4. We should consider the consequences of our planned action, not only to ourselves but to others as well.
5. Finally, we should have the moral courage to do what we believe is right.
As C.S. Lewis once wrote:
"Courage is not simply one of the virtues, but the form of every virtue at the testing point."