The Barometer’s Boneheads for 2011

Most ethics organizations and ethical lists try to name “the most ethical” (person) (company) etc. The Barometer is risk averse. Point to someone or some organization as the most ethical for a year and by the end of the next year they will do something stupid and you will look like an idiot. The Barometer far prefers a look at the mistakes for the sole purpose of introspection — “There but for the grace of God, go I.”

The following list is a head-turner because ethical lapses can happen to anyone. We study those who slip so that we can do the introspection, learn, and, hopefully, prevent ourselves and our organizations from going South. Among this list you will find individuals with criminal charges and civil cases pending. Others on the list escaped without so much as a raised regulatory eyebrow. Regardless of the outcome of their situations, these folks exhibited such ethical tin ears that they are the top-ranked boneheads for 2011, i.e., they pulled a stunt that should have been caught, could have been caught, and was caught. Just realizing their levels of achievements prior to their mystifying jumps off ethical cliffs should give us all pause. Without caution, introspection, and humility, it can happen to the best of the best. Read, learn, and, if necessary, change course. (The Baromter’s Boneheads for 2011 appear in no particular order.)

David Sokol, formerly heir to the Buffett Berkshire Hathaway throne. Bought stock in a company he then told Buffett to purchase –Oh, what a Berkshire purchase can do for the price of shares! (Resigned)

Dr. Beverly Hall, former Superintendent of the Atlanta Public School System. Created a culture of improving test scores and earned national recognition for 10 years of improvement; a 300-page report concludes that cheating was pervasive, right down to the teachers holding “test clean-up parties to change the kids’ answer sheets. The APS kids are now dumber than posts, and Atlanta is cleaning up the mess.

Joe Paterno, former head football coach at Penn State. Dumped child molestation allegations on university officials and did nothing more, saying, “I complied with the law.” Yes, but you should have helped the kids by doing more. A little outrage could have gone a long way. He knew; he failed to act. Where much is given, much is expected.

Graham Spanier, Tim Curley, and Gary Schultz, Penn State administrators who allowed the creation and tolerance of a culture in which the power of the football program found employees fearful of reporting the locker-room issues because of worries about losing their jobs. Indeed, the culture resulted in the resignation of the academic official responsible for disciplining student misconduct. To their credit, the PSU trustees cleaned house. To their shame, PSU students rioted over Paterno’s firing, choosing football over the protection of innocents. Yep, this was one heck of a football culture.

Ernst Lieb, former CEO U.S. Mercedes-Benz. Allegedly had home repairs and personal travel paid for by the company. Ousted. We at least expect something more clever from CEOs, especially at Mercedes.

Jack Kevorkian, Euthanasia advocate and practitioner. Died in a hospital while being treated for kidney and respiratory problems; “Better for thee than me!”

Arnold Schwarzenegger. John Edwards, and Anthony Weiner. You know who they are. How do these busy people find the time for political careers, wives, and families and dating (sexting) and then some on the side?

Solyndra, solar firm that received almost a billion in federal funding for a new factory and spent itself into oblivion, well, bankruptcy. The execs subordinated repayment of the taxpayers to private investors. Anybody want to buy a solar factory that produces solar panels that sell for less than they cost to make? A crackerjack operation, this was. All done in the name of green power!

Plankers, subway riders who hop the gates in order to ride free. They use funds they pool in order to get those who are caught so hopping out of jail. Do they not understand the costs of free riders? Tragedy of the commons?

Kwame Kilpatrick, former Detroit mayor who was released from prison after serving 14 months for probation violations related to his guilty plea on charges of perjury. He now faces pay-to-play federal corruption and insists that these charges are “absolutely untrue.” Depends on your definition of “true”

Jon Corzine, former chair at Goldman Sachs, former U.S. Sentaor from New Jersey, and former governor of New Jersey. At the Congressional hearings on the collapse of his hedge fund firm, MF Global (he was chairman of the company), he testified, when asked where over $1 billion of customer funds are, “I have absolutely no idea where the money is.” Corzine fired a pesky risk manager who kept telling him to stay away from Greek bonds. Corzine felt they were a good investment. Explains a great deal about New Jersey’s problems.

Eric Holder, U.S. Attorney General. Hit a snag or two with Operation “Fast and Furious,” an ATF program that
resulted in guns making their way into Mexico which then resulted in murders, including the death of one U.S. border agent. If Mr. Holder didn’t know (and he seems fuzzy on the whole “what did he know and when did he know it” concept), he should have. If he did know, he should resign. Only after his congressional testimony (where he was asked if he had spoken to the agent’s family) did Mr. Holder bother to contact the family. A stunning insensitivity that finds the Barometer nearly speechless.

Rupert Murdoch, CEO of News Corp., an organization that had to shut down its London tabloid, News of the World, when evidence emerged that the reporters were using all sorts of investigation tactics that ranged from invasion of phone privacy to paying off police officers. The mess found editors hauled before Parliament and bad news dribbling out each day about who knew what and when. News Corp. lost $9 billion in value as the scandal continued to deepen. Mr. Murdoch offered apologies, but that reputation thing was sullied. Bad moment for journalism ethics, for corporate governance, and for editors’ failures to ask the simple question, “How exactly did you get this information?”

About mmjdiary

Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD. The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards. Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio. She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News. In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles. Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
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