I read the news today, oh boy…
Here are the standout headlines in the Toronto Star business section today (Feb. 3).
“Scotiabank caught up in Royal Group mess”
“Nortel sues trio over bonus pay”
“Regulators move against fund company”
“Disciplinary hearing highly critical of top insurance salesman”
“Ex-CEOs retain officer in telecom firm’s towers … staff still handle their calls”
“Deal on WorldCom director payments ends” (it was the first deal where directors agreed to take financial responsibility for their own ineptitude)
“Grasso pay totaled $190 million” “Assistant got $240,000” “Spitzer seeks recovery of funds”
You don’t have to know the details behind each of these stories. Just the common thread: the sheer greed of seasoned professionals who should have known better.
I find this frustrating, because I believe business is a force for good. It enables thousands of people whom you and I have never met to spend inordinate amounts of time developing products and services they think we want and need. And we get to choose whether they were right or wrong. It’s a system that encourages you to go out and start any business if you think you can do better than the people out there now. It’s a system that thrives on freedom and runs on trust.
When capitalism goes bad, it’s often some small greedy entrepreneur who chooses a short-term payoff over a long-term relationship: the cab driver who takes the longer route; the fly-by-night retailer who will be gone before you find out the product you bought doesn’t work.
But as headlines like today's show, it is the greedy senior executives at the top of the heap who cause the most damage. Their need for more money, MORE, MORE!!!, made them devise or accept bad deals that essentially stole money from customers, shareholders and employees.
It’s tragic. Not only do these offenders rip off people who need the money more than they do; they give business a bad name. They force all businesses to accept more regulation and more bureaucratic procedures in a vain attempt to prevent such outrages from happening again. The red tape involved in Sarbanes-Oxley legislation alone will cost U.S. companies more than a BILLION dollar a year!
No one can stop these pinstriped pirates in advance. But here’s what business people can do: they must shun the greedy pigs. They must let the offending executives at WorldCom, Royal Group, Hollinger, Enron, Nortel, Tyco, and so on, know that they have betrayed a trust.
They have dishonored the world of business. And they must never be accepted among polite company again.