The Biggest Ethical Mistake

I was recently asked to write something on the biggest ethical mistakes made by CEOs. There are a lot to choose from so this took some thinking.

And the winner is: Judging information you receive by the person who delivers it. I know of no ethical fiascoes, including Enron, that did not have clear warning signs. Somehow these signs were ignored – and not without reason. The information that  enables a CEO to prevent an ethical crisis often comes from individuals who are afraid of taking any risks, whine about everything, and have a chip on their shoulder. I have just described one type of whistle blower. Really sharp CEOs ignore the source and act on the information, often at the objection of the top tier of their management. An ethical CEO is always asking, what if this information, although from a questionable source, is true? Would I gamble the future of the company on it not being true?

Lessons of the Secret Service Mess

Here in the DC Metro area, everyone is asking is how things could have gotten so bad at the Secret Service. Many employees of the Service must have known the vulnerabilities, so how could the folks at the top ignore this? My answer is that the bad news may never have reached the top. Several Service employees commented to the local media here that you simply did not raise issues or complaints. This is typical of line-of-command organizations, which turns out to be nearly all sizable organizations. In business, companies establish hotlines and compliance programs so that down line employees can short circuit the line of command. In fact, government often orders businesses to establish these mechanisms! But these mechanisms do not prosper in Federal agencies. Yes, employees can go to the Inspector General for their agency but these individuals are often closely bonded to the agency’s senior leadership. It is time for government to take some of the advice it freely gives to business and create genuinely safe channels through which employees can report concerns.