THE demise of Enron has left many people puzzling over a paradox. Why does it
seem that most of the people we know are ethical and just, while the senior management
of so many of our corporations are not?
While many companies are ethical in their treatment of workers, in reporting
of their financial results, and in their membership in the community, a disproportionate
number seem to be run by self-centered and ruthless managers.
Among the many factors that contribute to this apparent lack of ethical standards,
two stand out as especially troubling. The first can be described as leadership
eugenics, a particularly nasty sort of corporate Darwinism. The second, though
perhaps seeming less distasteful at first sight, is more insidious -- the increasing
separation of the ethics of the manager from the ethics of the person.
Leadership eugenics is the problem so many of us see in our working lives.
It seems that the more ruthless the manager, the more likely his promotion. Indeed,
there are some understandable reasons for it.
Corporations justly want to promote their own well being. In today's increasingly
short-term-emphasis markets, an ethically questionable manager can have a dramatic
impact by slashing headcount, hiding financial losses and gerrymandering the corporate
image with press releases. It is easy to see why such a manager might be rewarded
as his influence on today's stock prices becomes visible.
The separation of corporate and personal ethics is more troublesome, especially
in today's climate of moral relativism. ``I was only doing my job,'' ``If this
wasn't my job, it would be immoral,'' and similar statements abound as rationalizations
for unscrupulous behavior. Indeed, our ongoing escalation of the corporation as
a ``person'' with human rights (especially the right to sue) contributes to the
unethical manager's delusion that when he does something immoral in the name of
the company, ``he'' is not really doing it, the company is.
As history has proven, acting unethically is NOT good for the company in the
long term. Although slash-and-burn management can give stock prices a temporary
boost, over time the only reliable way to keep the price high is to generate long-term
value for your customers. In the long run, there is NO conflict between acting
ethically and doing what's best for the company.
In the face of these two factors, it is no wonder that the public continues
to be treated to spectacles like Enron. We the public can, however, take at least
some action in response. Indeed, if not we the public, then who else? If history
is any judge, waiting for government action to correct the problem is futile.
We can decide not to purchase stocks just because they are ``going up.'' Once
upon a time, investing meant finding companies that were producing value, and
had a reasonable story for continuing to produce even more value in the future.
If we stop rewarding short-term short-sightedness, perhaps we will have less of
We can stop the pretense of ``corporate action.'' Instead of thinking ``Corporation
X did so-and-so,'' we can look for the real actors. Behind every corporate action
there are real people with names. Exposing them when they act unethically might
make others in similar circumstances pause before they suspend their moral judgment.
Finally, and perhaps most importantly, we can behave morally ourselves. Beneath
every great scandal are hundreds of small ethical problems we all encounter every
day. We don't have to just go along, or take the easy path. If everyone practices
good ethical judgment in our daily lives, there is much less chance that our corporate
leaders will be able to get away with NOT practicing it.
© 2002 The Mercury News