Notas de Mariano Ferrari

Miércoles, 27 de julio de 2005

How Executives Can Assess Their Corporate Behavior

By Kevin Voigt

From The Wall Street Journal Online

When you look in the mirror, do you like what you see?

Around the world, executives are questioning their reflected image in the wake of scandals that felled executives at some of the largest companies in the world. Cutting corners on financial statements and making false promises to customers or clients to clench a deal aren't new issues in the business world, but the fall of Enron and Arthur Anderson shows how unethical behavior can have far-reaching implications.


"Ethics are central to business, and there are certain behaviors that are value-enhancing, some that are value-destroying," says Gary Biddle, a professor of accounting at Hong Kong Polytechnic University who studied the ethical implications of the Enron and Arthur Anderson accounting scandals.

As never before, corporate ethics are under the microscope as regulators, investors and the public feel the financial effects of poor business practices. And the nature of globalization means the corporate world will need to be more vigilant.

"There are thousands of ways to cut corners, and as the economy goes more global there are more ways every day," says Howard Gardner, professor of psychology at Harvard University in Massachusetts and co-author of the book "Good Work: When Excellence and Ethics Meet."

Getting Ahead asked Messrs. Biddle and Gardner about what ethical lessons business people can learn from the scandals through what Mr. Gardner calls "The three Ms": Mission, Mentor and Mirror.

Mission: Why are you doing what you're doing?

Western doctors take the Hippocratic Oath before becoming physicians and lawyers swear to protect the rule of law, but business people have no comparable creed to live by. "Strictly speaking, the only obligation business people have is to obey the law and make a profit ... if not, they go to jail or go out of business," Mr. Gardner says. "So good work has to come from within."

Many companies have a mission statement to try to keep the firm on the right track; even Enron had one. But this doesn't necessarily translate into strong ethical behavior. "All of us have an easy time coming up with a pious view of what we do," Mr. Gardner says.

In a broad sense, Mr. Biddle says, Enron lost its mission when it traded its heritage as a public utility for the quick-growth strategies of a New Economy company. This led executives astray as they turned to so-called creative accounting to protect the company's stock prices and growth strategy, Mr. Biddle says. Enron "had created a culture of deceit at the highest levels of the company," he adds.

For individuals, it's important to have a mission statement of your own, even if your company doesn't have strict business principles. What meaning are you hoping to gain from your work? What goals do you have as an individual? When facing an ethical quandary, your personal mission statement can give you a yardstick by which to measure your standards, Mr. Gardner says.

Mentor: Whom do you admire and emulate?

"Business is like life: There are always temptations, always shortcuts one might want to take," Mr. Biddle says. "Ultimately, the people you respect, the people who gain recognition and admiration, are those who stay within the right lines of the law and ... behavior."

In the Enron and Anderson cases, managers sacrificed principles that long-term trust depends on, such as accountability and honesty, for short-term gain.

By all accounts, former Enron Chief Executive Kenneth Lay was "a nice guy," Mr. Biddle says. "I've talked to people who have known him and they say he was generous, gave to charity. At the same time he allowed the development of this culture of getting away with things."

What makes good mentors in the business world are executives with an eye toward the long term, Mr. Gardner says. Researchers from Harvard, University of Chicago, the Peter Drucker School of Management at Claremont Graduate University in California, and Stanford University, also in California, conducted a study of ethics and professions called the GoodWork Project. It compared a group of 20 so-called good executives nominated by business people, professors and deans of business schools with another group of 20 selected at random. Out of those 20 nominated as examples of great executives, only two talked about the importance of the short term, with the rest taking a longer-term approach. Executives selected at random seemed to live or die only by the next quarterly results. The interviews were completed in 2000, when there still was a "frenzy for stock value," Mr. Gardner says.

Executives should bear in mind the standards they set will have consequences long after they've retired. CEOs such as Mr. Lay once were stars that young executives emulated; when mentors like Mr. Lay skirted the rules, those below followed his example. "If you cook the books, it's one of the worst things you can do as an executive," Mr. Biddle says. "It can haunt you into retirement."

Mirror: Are you proud or embarrassed by the image staring back?

Are you satisfied that your company is maintaining strong ethical standards? Enron employees interviewed by Mr. Biddle said they often would ask each other around the water cooler, "How do you think the company is making money?"

Questioning corporate tactics isn't so easy; it often is viewed as a sign of weakness. But as Mr. Gardner adds: "If you don't like what's going on, at some point you have to speak up."

To be effective, influence counts. "If you raise questions, you have to have a decent relationship with the people you work with. Introduce it into conversations' with subordinates and superiors alike, Mr. Gardner says. If you can't make a change from within, perhaps it's time to change companies if you still don't like what you see in the mirror.

Someone who would easily pass the mirror test is Sherron Watkins, the Enron executive who wrote the prescient letter to Mr. Lay warning the company could "implode in a wave of accounting scandals." "She could have stayed silent and been a good soldier, but she decided to do something about it," Mr. Gardner says.

"Criticism is easy; the real challenge is doing what needs to be done to achieve business goals, but do it in a way you're proud to see done," Mr. Gardner says.

Por: Mariano Ferrari | General | Comentarios (0) | Referencias (0)