Jes Staley, the CEO of Barclay’s was incensed about the content of an anonymous letter than bank had received from “John Q. Public,” expressing concerns about a hire that Mr. Staley had made of a former colleague of his at Chase Bank. Mr. Staley felt that allegations in the letter were incorrect and asked that the individual’s identity be disclosed. About that time, a second letter came in with similar content to the first.
The British Financial Conduct Authority(FCA) imposed the large fine and Barclay’s board took away 500,000 pounds from Mr. Staley’s annual bonus. And the story is not over. New York state authorities are still investigating.
Mr. Staley’s initial defense was that the decision to intrude into the investigation of the letters were made at lower level, without his knowledge. He then progressed to the belief that the letter was from an outsider and therefore not a whistleblower situation and that he could know the identity. The FCA found that the identical nature of the two letters made it likely that they came from inside the organization. However, without talking with compliance, the board, or even the executive committee, Mr. Staley told security that he was cleared for knowing the identity. Those within Barclay’s then told the board about the unmasking of the whistleblower, and the board reported the incident to regulators. Oh, what a tangled web.
The fine is one of the first fines imposed by the FCA under new British laws intended to hold financial officers personally accountable for misconduct. Some view the fine as a pittance, while others have applauded, noting that the level of the fine was nearly 1/4 of Mr. Staley’s annual pay.
The offenses by Mr. Staley were serious. He apologized for his mistakes and labeled his actions “inappropriate.” The real damage will take some time to repair. He is still at Barclay’s, still in charge, and he unmasked, without approval by compliance or the board, the author of an anonymous report. That type of conduct in a CEO does chill the ethical culture.
Since 2009, the number of hit-and-run vehicle deaths has increased 60%. The total was 2,049 for 2016. Running away from the mortally wounding is a shocking act. An act that reflects a lack of character. That these cowardly acts of non-accountability are on the increase is some measure of where we rein our ethics.
When hubris kicks in, collapse is not far behind. Tesla’s stock fell over 5% with the testy behavior of Tesla’s CEO. Iconic CEOs spell trouble when it comes to companies and their futures.
Martin Winterkorn, CEO of Volkswagen from 2007 to 2015 was indicted for conspiracy and wire fraud in connection with the company’s emissions testing in the United States. Volkswagen indicated that It was cooperating with U.S. officials, bit neither Mr. Winterkorn nor his attorney had any comments following the announcement of the indictment.However, Mr. Winterkorn said after the emissions scandal emerged in 2015 that he had no knowledge of the software fix that caused emissions in VW cars to be lower during testing than they actually were. The indictment alleges that he was told about the emissions evasion techniques in May of 2014 and again in 2015.
The indictment represents the highest executive-level charges since 2011, when Siemens executives were charged in connection with the company’s payment of bribes in violation of the Foreign Corrupt Practices Act (FCPA).The allegations in the indictment do not line up with the findings of VW’s own internal investigation. Tangled webs and all being what they are.
The New York Times Ethicist had another gem on ethics. A family called for an Uber and, Surprise! a driver who did not seem to be acquainted with English or the area, showed up as their means of transportation. The drive was struggling with GPS, incorrectly headed to the Holland Tunnel, and the family instructed the driver to pull over illegally. The family wanted out before they headed to New Jersey and wasted time. The police arrived, poised to issue a ticket. The police backed off, but the family wanted to know if they were obligated to pay for the ticket. The Ethicist advised that the driver made the mistake on the GPS, ergo, driver pays.Lip service to “you cowed him into it … you can afford to pay better than an Uber driver….” The main concern of the Ethicist was to make sure the driver got a bad review.
Once again, a key point goes unaddressed. With Uber. Lyft, and any other entrepreneurial ride services, there is assumption of risk. These are not experienced drivers. In too many cases, whatever driver screening occurs has proven to be flawed. The drug testing, who knows? In short, you get what you pay for. If you want a driver who knows the ropes and GPS, hail a cab. Uber is an adventure at best and, at its worst, well, you have seen the headlines. Disruptive business models often disrupt lives, including those of their customers. There are costs associated with transportation. You can reduce screening and reduce costs. You assume that risk. Oh, and a take a gander at the Bay Area and the congestion that has resulted from all those Uber cars on the roads. We are all subsidizing that with our time. And we are not as successful in talking the police out of tickets for illegal turns so that we do not have to sit in traffic.
Thanks to USA Today and Bridge by Instructure for this tidbit on fear and silence in the workplace.
Oh, what times are these when New Jersey senators who were tried on corruption charges for accepting gifts from one Salomon E. Melgen are given a serious tongue lashing. The trial ended with a deadlocked jury. But, the Senate Ethics Committee comes to the rescue and has ordered Senator Menendez to repay the market value of all of the gifts received. Senator Menendez’s lawyer was outraged at the committee’s actions, noting that, “The [criminal] proceedings clearly demonstrated that there was no violation of the any law.” Assuming arguendo that the jury was correct to be stumped by it all, law and ethics are two different things. Senator Menendez has a clear criminal record and an ethics conviction. The law and ethics are two different things. Not breaking the law does not ethical conduct make.
The Labor Department is now investigating Wells Fargo. The investigation centers on a push by the bank to have employees move their retirement funds form 401(k) plans (a low cost option for them) to individual IRA accounts (more expensive). The investigators are also focusing on whether in-house retirement plan services were pushing employees to buy in-house funds — something that generates revenue for the bank. The investigation comes one week after the bank agreed to pay $1 billion for claims of misconduct it its auto-loan and mortgage lending divisions.
The experiences of Wells Fargo and Chase and many other organizations that make the headlines for ethical and legal lapses illustrate an important principle. Once regulators find an area in which there has been unethical conduct, they and other regulators begin reviews. They generally find more stuff. When the ethical culture has gone south, there is never just one thing.
The Barometer always loves it when organizations that have had a bad spat of publicity put together highfalutin task forces to solve their problems. Of course, whatever the highfaluters come up with is entirely voluntary. So it is with the NCAA Commission on College Basketball, headed by Condoleeza Rice. The NCAA will have to vote on the recommendations of the Commission. Good luck with that.
When will we realize and accept that there is money in college sports for educational institutions, coaches, and players and that level of money drives perverse behaviors? From UNC to Syracuse to Louisville, college basketball is the stuff of limitless imaginations put to use to come up with ways to win big. Whether by cheating, bribery, or point-shaving, schools cross lines. The NCAA is shocked, shocked, and they muster up some penalties, maybe, after years of investigation and debate. And on the cheating in school, the Commission only admonished the NCAA to “clarify its role in addressing academic fraud.” That will get the knees shaking in the ivory tower.
The Commission made it far more complicated than it needs to be. The Commission only punted (wrong sport, but you get the idea). Here’s the rule: You cheat, you will hurt. The first part is inevitable (human nature). The second one is doubtful – the chest-pounding and sanction are imposed and lifted. This root cause was not addressed by the Commission and is unlikely to arise sua sponte at the NCAA meeting on the report. Until it is addressed, basketball and all its facade of student-athletes marches on.
Sunday’s New York Times “Ethicist” column had a dilemma from a nonprofit employee. The employee knows that a co-worker who works at home, by her own admission, is actually not working but running errands and taking care of her children. The co-worker has been granted an indefinite period of time to work from home following the end of her forthcoming maternity leave. The employee inquired as to whether she should speak up. Everyone shout your answer in unity here and add, “Why did you have to write to someone for an answer?”
Contrast this scenario with an obituary that appeared in the Wall Street Journal’s weekend edition about Scott Friestad, an SEC enforcement division attorney. Mr. Friestad worked from home, confined to his bed, because he was dying of cancer. A 23-year veteran of the agency, he was regarded as a mentor by many. He worked right up to his final days, providing mentoring and what his co-workers called “his good ideas about the way out of a problem.”
There is working from home and there is working from home. The contrast here is instructive and motivational. RIP, Mr. Friestad.
That time with the kids . . . repetitive, mind-numbing, and the word, “Again!” over and over, well, again. Some parents can’t take it, so, for example, they stack the decks in Candy Land to ensure that their children get to the magical candy capitol quickly. Let the kids win by holding the low cards up their sleeves or under the table. Wall Street Journal, April 19, 2018, p. A1.
The goals are noble. Time with the kids. Getting them away from iPhones and computer games is critical. Reliving our board-game childhoods. Who would have thought cheating was the cure for boredom.
44% of Americans say that popping bubble wrap is “their most oddly satisfying behavior.” The other 56% are not being truthful. Popping bubble wrap is great fun.
Thanks to Clorox for their work on this issue.
Nearly one in four single men lie about not having a date for Valentine’s Day.
Nearly one in six single women lie about not have a date for Valentine’s Day.
Conclude whatever you wish about the difference. Thanks to Dairy Queen and Toluna research for their work.
The captain of the Australian Cricket Team apologized, in tears, for the cheating plot he and two other team members concocted. Their plot involved sandpapering the cricket ball, something that makes the ball more difficult to control. The three were caught on video and removed from the team and banished from cricket for 9 months to one year.
The captain of the Australian Cricket Team is right up there in power rankings, second only to the prime minister. Australians take cricket seriously and fooling around with the cricket ball dishonors the team and Australia.
The young team captain seems like a sincere young man, and his remorse and regret are the marks of a mature individual. The old saw is that everybody cheats in sports. Perhaps so, but the difference lies in the response. Contrast this young man’s post-cheating scandal behavior with Tom Brady’s. Denials, refusing access to his cell phone, and going to court are the stuff of fooling around with football inflation. Or consider all the steroid athletes and their chutzpah in denials. And the team owners and the league saying, “Who knew?” One more difference, the coach for the Australian Cricket Team resigned. He was not implicated in the actions. He did so out of honor. We could use a little cricket in our sports.