There was a time when one’s honor meant everything. A person’s handshake was his word, and to violate it brought shame and isolation from his peers. Honor was the hallmark of a great leader, one who built trust among his fellows because he stood by his convictions, and delivered on his promises. Great men and women have shared this attribute, as it remains the single trait above all others that truly define an individual.
The CEO today is a corporate warrior, engaged in a battle for market-share, and responsible for the wellbeing of those under his or her command, sometimes numbering in the tens of thousands. The CEO is charged with the responsibility of ensuring that the organization runs smoothly and profitably, and that its positive influence and good reputation remain intact.
For their heavy burden of accountability, and the fate of employees and stakeholders resting on his shoulders, the CEO is well compensated, sometimes in the tens of millions of dollars, plus bonuses and stock options. Entrusted with the key decision-making, bequeathed so much power, looked up to by those inside and outside the organization, the CEO is a lofty and honorable position.
Or once was. For sadly, with increasing numbers, the mighty have fallen.
The financial collapse of 2008 saw bankers and brokers fleeing the debacle they caused while lining their pockets with the spoils. Enron and several other blue-chip corporations collapsed through fraudulent schemes destroying the life-savings of millions. Corporate raiders committed hostile takeovers to bleed companies of their assets and watch them wither under bankruptcy.
Where was the honorable CEO in all this?
To hear their side of the story, listen to the testimony of John Watson of Chevron explaining in hearings how he was not responsible for the massive pollution and health crisis in Ecuador, or the dumping of a million gallons of toxic waste into the rain forest to save $3 a barrel.
What’s going on?
Analysts have weighed in with a variety of explanations, most frequent among them being that CEO’s can’t really manage a massively sized organization. They are too far removed from the action and can’t possibly understand what’s happening in their company. This serves CEO’s well as they can hide behind the fact that they “didn’t know”.
If this were true, a re-organization would fix the problem. Despite attempts to do this, nothing has changed for the simple reason that the real cause is rooted somewhere else.
Specifically, the CEO acted without HONOR.
The organization collapsed under their watch. There’s no escaping that fact. Yet they duck under a litany of justifications to avoid accountability – at all costs. No matter what reasons are given, no matter how ‘reasonable’ their explanations are, they have forsaken any semblance of honor for mere survival. Self-interest has taken precedence over the wellbeing of others including the corporations that gave them their trust.
In the Naval Code of Conduct, the Captain is the last to leave a damaged vessel, and in the direst scenarios, he goes down with the ship. But these cowardly CEO’s abandon the sinking vessel like the South Korean ferry captain who jumped ship, leaving more than 300 young men and women to perish. He’s now serving a 36-year sentence.
The sad irony of the dishonorable CEO is that his or her disavowal of responsibility is a declaration of their gross incompetence as a manager. Had they the know-how and the confidence to right the sinking ship, they would not have resorted to irregular practices and fraud. They sacrificed their honor for self-preservation.
Honor defines character and forges reputation. It inspires trust and helps corporations and society advance. A CEO always has a choice – to be honorable, or to sell his soul to save his skin.
If honor among CEO’s could be restored, so many other problems would resolve. Everyone would win. None more so than the CEO.