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Has Bad Behavior Irreparably Damaged the Title CEO?
Day after day we’re being pummeled by news of bad CEO behavior, so much that you have to conclude that America’s business executives are incapable of getting the message--its time for restraint. In the last couple of weeks there’s been one egregious example after another of excess, greed and sheer stupidity. It’s so ridiculous that you’d have to conclude these CEOs aren’t just out of touch… they simply don’t care.
From the $18.4 billion in bonuses paid out by Wall Street last year, to the news that former Merrill Lynch CEO John Thain spent $1.22 million to redecorate his office; and word that Citigroup had planned (and later denied they would) purchase a $50 million 12-seat luxury jet-- after getting $45 billion in Troubled Asset Relief Program (TARP) funds. So you have to wonder why aren’t CEOs at least afraid of how these actions might be perceived? They’re not just inviting regulators to their doorsteps, they’re risking their company’s hard-won brands and possibly their own high-flying careers.
Has the title of Chief Executive Officer been irreparably damaged by all this news? In the court of public opinion, yes – no question – the title has lost respect. Yet, across America, there are countless CEOs who are doing the right thing, i.e., rolling up their sleeves and working hard to keep their companies on course. These CEOs won’t make headlines but some are downright heroic as they try to keep their employees on the job and do right by their customers.
For example, the once retired chairman and owner of a commercial lending bank in Arizona is staying in his empty house, sleeping on an air mattress. His family had moved to the Northeast but he came back to the Southwest after the real estate collapse threatened his bank’s survival. He is working 14 hour days, away from his family for weeks at a time, going out every day speaking to customers, and spending hundreds of hours negotiating with bank examiners and creditors, to buy time.
This executive isn’t just making decisions for the sake of appearances – he simply will not tolerate excess. He fired his CEO for taking home unwarranted commissions, recovered the company car that his CEO drove (a $100,000 Range Rover), listed it for sale on Craig’s list, and purchased a used Passat for himself so he could sensibly commute to the bank every day.
While some CEOs are splurging, plundering and pillaging their businesses, the vast majority are not. And if you look around in your own community, you realize that you know these good folks. They are your neighbors and friends who are not taking home a paycheck right now, they’re instead lending money back to their businesses, agonizing over layoffs, working late into the night, negotiating with creditors and virtually killing themselves to stay afloat.
So though a few highly questionable CEOs have besmirched the title, it stands to reason that most chief executives, whether from a Fortune 1000 firm or a small, midsize concern, remain passionate about their businesses and just as devoted as ever to their employees and customers. They’ve made personal sacrifices while asking their employees to do the same, and they don’t need federal regulators to tell them what is right – their judgment is all they need. Plus, their principles are on display every single day, in the form of the decisions they make. This is the true spirit of American business which will not be corrupted or compromised by greed or selfish interests.
Many people out there aspire to be a CEO one day – for them it would mark the pinnacle of their career. This part isn’t going to change just because of a few bad examples. Becoming CEO or president of a company is a responsibility that most people take very seriously. That’s why it’s important for good CEOs to keep doing the right thing and setting a good example for the rest. For the CEO title to regain credibility with the American public, the media probably also needs to start taking note of these good guys and good women.
Tremendous government pressure will be exerted upon CEOs –for awhile at least – until the economy is back on track. President Obama will try to use a bully pulpit to achieve this, taking steps like sending Treasury Secretary Timothy Geitner to Wall Street to deliver a message that these CEOs’ actions are unacceptable.
There’s word too that New York Attorney General Andrew Cuomo may demand the return of $4 billion in bonuses paid by Merrill Lynch & Co just before it was acquired by Bank of America Corp. Cuomo wants to know what Bank of America Chief Executive Kenneth Lewis knew about the accelerated bonuses and about Merrill's surprise $15 billion net loss in the fourth quarter, one source told the agency.
CEO pay will remain in the news too. The CEO of a Standard and Poor’s 500 company made, on average, about $14 million in total compensation in 2007. Senator Claire McCaskill’s initially offered a bill capping executive pay at companies accepting federal bailout dollars at $400,000 a year, what President Obama makes. President Obama has now followed suit with a proposal for a $500,000 cap.
As an executive coach who has worked with outstanding business leaders over the years, I wrote a book called “Motivate Like a CEO” because I believe there are many, many examples of motivating, inspiring leaders out there who are connecting people with purpose and passion toward a common goal. This might be the highest definition of leadership, in addition to the countless leaders out there who go to work every day passionate about what they do and who know how to empower others to achieve great things.
In today’s current business climate, we certainly need more leaders like this, who can genuinely communicate and motivate their organizations. People long to be a part of the turnaround, and they have many of the answers to your company’s struggles right now. If you empower them and harness their creativity and energy, you’ll accelerate your own recovery and position yourself for growth as the economy recovers. You’ll also be well-equipped to take advantage of the many opportunities that still exist, even in these bewildering and turbulent times.
Many more articles in Insight & Commentary in The CEO Refresher Archives