by Ann Charles
Timing is everything. Could there be a worse time than now be a CEO? First the world economic calamity shined a light into the dark corners of the banking and finance industries. The heads of powerful institutions were called on the carpet to explain a thing or two about credit default swaps and collateralized debt obligations. Then, after companies deemed “too big to fail” suddenly failed, stalwart CEOs from the automotive, banking, and insurance sectors had to ask the American people for a bailout. Reverberations of this catastrophe have cost the economy eight million jobs and counting.
As each headline about corporate malfeasance is juxtaposed against record profits and bonuses, Americans become more jaded about the ethics of today’s business leadership. Many CEOs seem to lack the emotional awareness to deal with their own image problem. Goldman Sachs’ CEO claimed to be doing “God’s work” before settling a fraud suit to the tune of $550 million for pushing a product that was designed to fail, all in an effort to boost record profits. Meanwhile, the economy spiraled in. After the Gulf oil spill, former BP CEO Tony Hayward famously said: “I would like my life back,” presumably echoing the sentiment of those who died during the explosion.
Robert Thompson put it this way: “About the only villains left are terrorists and CEOs–and terrorists will probably be portrayed as sympathetic long before CEOs.”
It’s no wonder CEOs are vilified in the press as power-crazed, money grubbing scoundrels. We used to be amused by Donald Trump’s “You’re fired!” on NBC’s The Apprentice. With unemployment stuck at 10 percent (some say it’s more like 22 percent), it’s not funny anymore. Then you have Mr. Burns from The Simpsons, a maniacal CEO caricature. One of his favorite sayings is, “What good is money if it can’t inspire terror in your fellow man?” What, indeed!
Still, when it comes to CEOs, we can’t seem to get enough of our idolization of the culture of money. The Wall Street Journal recently published a list of the top-paid CEOs of the decade. With perfect sleight of hand, the article noted that four of the top ten highest-earning executives ran companies whose shareholders lost money over the decade. Lost money?
It’s “pay without performance,” says Jesse Fried, a law professor at Harvard University. It’s also the title of Fried’s book, which is subtitled, The Unfulfilled Promise of Executive Compensation.
On the bright side, with the collapse of the global economy, it seems we have finally reached a tipping point in changing the culture of business leadership. Recently, a group of American millionaires has called for an end to the tax breaks for the very rich. In the spring of this year, the Responsible Wealth Project was launched. The belief at the bottom of this initiative is that the wealthy can and should pay more to help support the dwindling budgets for education, health, and other critical social services at the state and federal levels.
What’s more, corporate social responsibility (CSR) and socially responsible investing (SRI) are both on the rise, showing support for holding companies accountable for the new “Triple Bottom Line”: people, planet, and profits.
I like to ask CEOs, Would you rather be known for how much money you made, or how much you gave away? Andrew Carnegie, once the richest man alive, believed in being remembered for the latter.
Today’s CEOs are often portrayed as larger than life. The truth is, they are probably not quite so evil nor as brilliant as they made out to be. And once in a while, they do something that truly surprises us. This month, Warren Buffett and Bill Gates announced that 40 of America’s wealthiest billionaires have signed a “Giving Pledge” in which the undersigned vow to give away half of their wealth to worthy causes during their lifetime. This seismic shift in wealth transformation exemplifies the best of America’s culture of ingenuity and success. Put simply, Americans like it when the masters of the universe set a good example for the rest of us.
Ann Charles is CEO of BRANDfog, offering social media and Corporate Social Responsibility strategy for CEOs, and founder of The Great Leaders Conference, celebrating Great Leaders in CSR, Social Advocacy and Sustainability.