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Restoring business credibility and trust - Guest Column - Brief Article

DSN Retailing Today, June 10, 2002 by Bob Verdisco

In the 1987 movie "Wall Street," Michael Douglas gave an Oscar-winning performance as a slick, outrageously successful and utterly unprincipled securities trader named Gordon Gekko, who is described by another character in the film as having undergone "an ethical bypass at birth." In one scene, while instigating a hostile corporate takeover, Gekko tells the assembled shareholders of the target company that "greed is good." His statement is rewarded by the shareholders with a standing ovation.

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That movie scene came to mind recently as I was pondering the ongoing developments in the Enron debacle. Reading about Enron's implosion and the accompanying allegations of executive misdeeds, accounting scandals and revelations of widespread conflicts of interest at some of Wall Street's most venerable firms, one is forced to conclude that if we haven't quite reached a crisis in business ethics, there's at least major cause for concern.

What's most troubling about the current situation is that many of these questionable practices apparently have been going on for so long that they've become accepted in some circles as standard operating procedure. Of course, it should be noted that the overwhelming majority of American executives--at least those I've been associated with--are forthright individuals who conduct their businesses on the highest ethical plane. It's just a few high-profile bad apples that threaten to give a black eye to all of corporate America.

How did this happen? When did self-interest and greed on the part of some senior executives displace the traditional commitments to customers, shareholders and employees?

Are the real-life Gordon Gekkos to blame for the current ethical muddle? Only marginally. The shift toward a new ethos in the executive suite started in the early 1990s, when the so-called New Economy thinking began to dislodge Old Economy principles--the traditional way of doing business seemed passe. The challenge for executives was to transform leviathans into gazelles: to create flexible, fast-acting new entities that could compete in a business world that was changing at a dizzying rate. In that heady atmosphere of overnight fortunes, with its emphasis on driving up stock prices, it was perhaps inevitable that ethical lapses would occur.

So, how to reverse the trend? Well, now that the soft underbelly of the dot-com Chimera has been exposed--and the New Economy has lost some of its luster--it might be easier to restore credibility and trust than it would have been at the height of the '90s feeding frenzy.

But it has to start at the top. The top executives in any organization must set the ethical tone. They must create a culture that rewards integrity, as well as creativity. They must create a system of ethical checks and balances by tolerating--even encouraging--skepticism and dissent. And, above all, they must accept responsibility for all shortcomings or failures.

However, reversing the ethical slide does not mean undoing the positive aspects of the corporate transformations of the '90s. Even the leviathans are now exhibiting gazelle-like tendencies, and that's a good thing.

What it does mean is restoring honesty, integrity and fairness as the foundation for success. And proving that the Gordon Gekkos of the world are dead wrong.

Retail Industry

Restoring business credibility and trust - Guest Column - Brief Article

DSN Retailing Today, June 10, 2002 by Bob Verdisco

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