One response to “The Ethical Way to Balance Safety and Costs”

  1. From Scott Harshbargar, former Massachusetts Attorney General:

    I thought this was a very timely and thoughtful commentary! My sole critique –and maybe the most serious issue: Do we not also need to identify clearly who is responsible for this breakdown/failure –and identify and demand remedies?

    For example, how did the Board fail to identify this issue? and if they knew, what is the remedy if they failed to act? This is like AIG, as reported in Noceras’s column Saturday on the FIC Commission hearings –no one at AIG at CEO, CFO, Chief risk officer level, or obviously, the Board, knew what the financial products guy had done/committed to or how it related! Is the SILO effect we’ve seen so often in these governance breakdowns a conscious strategy to allow maximizing of revenues (at expense, if need be, of safety, ethical performance, regulatory compliance…), or a fundamental example of the incompetence of most Boards and even CEOs as leaders/managers?

    Will their compensation/bonuses be affected at all?? Absent termination/shame, what will the punishment be, once fault/responsibility is clear, other than criminal/civil litigation? As a practical matter, after a decade of these kinds of fundamental failures and breakdowns in supposedly “best practice” governance and ethics/risk management/compliance systems in major corporations, how can we have any faith in the capacity of self-regulation to ever maximize/balance the public interest? Absent strong external regulation/enforcement, and/or the realistic threat or predictability thereof , and vigilant “civic capitalism/engagement”, these best practice ethical and governance systems we recommend/believe in (including, for example, internal policies on pro bono, diversity, citizenship, and other intangible values creating a “culture”) are surely, at best, aspirational, and honored only and/or primarily when it suits (or does not at least burden) the corporate self-interest or bottom line.

    Is there a good reason not to be this cynical? (Or should I wait for CNN to provide their answer through Eliot Spitzer’s new show as part of his “second act”?)

    Scott Harshbarger

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