Jon Corzine, the former chairman and CEO of the collapsed MF Global Holdings, is in court battling with the Commodities Futures Trading Commission over liability as the person in charge when the brokerage firm hijacked customers’ account to support its bets on solid investments like Greek bonds. Mr. Corzine’s lawyers have argued that “no principle of law or logic” supports the CFTC position that Mr. Corzine should be held accountable for the losses. His lawyers have argued that Mr. Corzine did not control the accounts because transfers had to be approved by finance, treasury, and operations personnel.
Funny how leaders command and demand salaries, perks, attention, and obedience as their firms clip along. However, when something goes wrong, they knew nothing, they are outraged, and they did not wield the power to stop their staff of rogues. At VW, the CEO knew nothing about the trickery in the emissions software ginned up by dastardly engineers. At GM, no leader knew anything about the “switches from hell” that were scaring GM employees and causing suppliers to raise questions. The former head of the Secret Service knew nothing about the raucous behavior of agents that seemed to be legendary in the ranks and well known around DC and parts of the underworld in South America and Europe. Intelligence reports are whitewashed to make threats less ominous and leaders who receive those reports are outraged at the behavior of CENTCOM employees. IRS agents target taxpayers by name and purpose and leaders are angry about their behavior. The leaders vow to “get to the bottom of all of this” with a full investigation. Sadly, the leaders are already at the bottom, on so many layers.
A leader who demands results, repeats mantras, and uses fear to bring out the worst in decent employees is indeed the controlling person. Assigning physical control of accounts, operations, or products to others is a coward’s way of placing distance between self and action. The distance is not there except on paper because employees in respond in an autocratic and driven culture when the worst behaviors are recognized and rewarded even as those who throw down flags are cast out. Mr. Corzine got rid of a risk officer who challenged the firm’s exposure. How more hands-on can a leader be than signaling that he brooks no dissent? The authority to transfer to and from accounts is not the issue. The authority to drive employees to engage in wrongful transfers is. Under today’s leadership principles, cowards step up to claim technical innocence and escape accountability for behaviors on their watch — a watch in which they poisoned minds and culture, driving others to do their dirty deeds.