Integrity
Matters
April 28, 2004
Keeping
business honest requires new laws
Question: (E-111)
Dear
Jim:
Almost
every day there are reports of individuals, many near
the top of giant accounting firms and multibillion-dollar
investment companies, who are still being cited for violations.
I thought that the Sarbanes-Oxley bill of 2002 was supposed
to fix these legal and ethical problems. Will Congress
now feel compelled to pass more laws to clean up the misbehaviors
of business in an effort to bring back integrity?
Response:
Unfortunately,
yes. And here are four reasons why:
- Janus
Capital, the Denver-based mutual fund, recently named
a new boss in an attempt to move beyond its upcoming
actions to settle trading abuse charges.
- Royal
Dutch/Shell leadership faces challenges in the wake
of its energy-accounting scandal.
- USA
Today's top editor, Karen Jurgensen, quit amid a probe
of how high-profile reporter Jack Kelley was able to
fabricate articles.
- New
York Times executive editor Howell Raines, was forced
to step down after revelations about fraudulent articles
by reporter Jayson Blair brought to light poor newsroom
management practices.
Even with bad news about a variety of business leaders,
the economy seems to be getting stronger. But it may be
wise to ask if this gradual business rebound is simply
another opportunity to be seized by the next round of
hucksters? Unfortunately, when consumers, federal regulators,
elected representatives and other leaders let their guards
down, conniving and articulate crooks can strike again.
But there is hope and lots of it. One interesting example
of a leader who has recently and successfully addressed
the marginally honest is Warren Buffett, known as the
"oracle of Omaha." Buffett's speeches have become
so popular that he is now selling tickets to non-shareholders
who may wish to hear him speak at his annual meeting in
Omaha.
According to Berkshire Hathaway's chief financial officer,
Buffett decided to sell tickets for $5 a pair after he
learned some shareholders were auctioning tickets on eBay,
for as much as $250 for four passes. According to an April
17 report in the New York Times, about 10,000 shareholders
and admirers flocked to Omaha last year to the annual
event that Mr. Buffett calls "Woodstock for capitalists."
Buffett apparently doesn't tolerate folks taking advantage
of others. He didn't ask legislators to pass a new regulation,
he "self-regulated" these inappropriate behaviors
and fixed the problem.
Individuals can blunt the bad behaviors of the crooks
and the scheming minority by taking positive and constructive
actions, every day. Each person can expand and extend
the national conversation on integrity -- one reaction,
one decision, one conversation, one transaction and one
relationship at a time.
