Category Archives: Seven Signs in Action

How Many Times Must We Live Through The Same Ethical Collapse Signs? Zenefits

The story is always the same. A new company, a darling with double-digit growth that brings the IPO, and more growth. Annual recurring revenue (that magical measurement that software companies love) went from $1 million in the company’s starting year … Continue reading

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The Children’s Hospital of Philadelphia Embezzlement Case: Did They Miss Red Flags?

The stunning indictment and guilty plea of Roosevelt Hairston Jr., the former general counsel and executive vice president of Children’s Hospital of Philadelphia(CHOP), for embezzlement gives us pause. The pause comes from the fact that the embezzlement amounted to $1.7 … Continue reading

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The Dean, That “Tone at the Top” Thing, and the Sting of “If I Did That . . . “

Dr. Atul Gawande gave a terrific address to the 2010 crop of new docs graduating from Stanford University. You can read that address, “The Velluvial Matrix” in the June 16, 2010 issue of The New Yorker. The graduating docs at … Continue reading

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Weeding Out Rogues

One of the Barometer’s most frequently asked questions is, “How can you screen rogues out of your company when you are hiring?” The first response is that you can’t always screen them out – you hope that you have the … Continue reading

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Weak Boards — Redux

Robert C. Pozen proposed “A New Model for Corporate Boards” in a Wall Street Journal op-ed piece on December 30, 2010.  Add to the dashboard school yet another feeble quantitative measure that promises to provide the glorious solution to the … Continue reading

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Johnson & Johnson’s McNeil and the 2010 Tylenol Recall

The conduct is different from McNeil’s 1982 recall when the 8 cyanide poisoning deaths occurred in Chicago. In that situation, McNeil earned the praise of the president, the loyalty of customers, and a get-out-of-jail free pass on everything since that … Continue reading

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Former “Basket Case” SEC Lawyer Gary Aguirre Receives $755,000 from Agency

Gary Aguirre, a former SEC lawyer, was right, the agency was wrong, and he has had the last word.  In 2005, Mr. Aguirre tried to get the agency to move on Pequot Capital Management for insider trading in Microsoft stock.  … Continue reading

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There Is Always a Precursor: The Wal-Mart Internal Report

The Seven Signs of Ethical Collapse documents the phenomenon of the precursor in companies that find themselves in legal and ethical difficulty.  The precursor can be a lawsuit that is dismissed, a regulatory agency investigation that finds nothing, an employee … Continue reading

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The “Slam Dunk”/”Quick Hit” Culture at the SEC

If you thought that “The Seven Signs”  applied to only for-profit entities, you would be wrong.  Numbers pressure is everywhere, even in government and even if meeting the numbers is self-destructive.  If the just-released Office of Inspector General’s report is any … Continue reading

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Thomas J. Petters Gets 50 Years for a Ponzi: The Seven Signs Show Up Again

Minnesota businessman, Thomas J. Petters, was sentenced to 50 years for his $3.7-billion Ponzi scheme that claimed to be selling appliances to Costco.  What a ride he had!  He purchased Polaroid, Sun Country Airlines, and part of Fingerhut Cos.  He drove … Continue reading

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