Thursday, October 8, 2009

When CEOs Misbehave

I recently read the transcript of an interesting interview with Jeffrey Pfeffer, the Thomas D. Dee II Professor of Organizational Behavior at the Graduate School of Business, Stanford University, published on Guy Kawasaki's blog. Pfeffer was asked, "How do you stop the misdeeds (for example, Enron) in organizations?" Here's his answer.

"What is interesting is that there are few social sanctions—as contrasted with legal or financial ones—for bad behavior. Executives who have served jail time are back on TV and are still celebreties. More to the point, they aren’t shunned by their colleagues. The prevailing mood seems to be, as long as people retain enough wealth, they can buy their way back by donating time and money. If we are serious about enforcing norms, then there have to be real sanctions. In the military academies, violations of important norms are met with expulsion or social ostracism—eating alone, for instance. Not so, not yet, for the most part in the corporate world."

Makes sense, doesn't it? When we learn of a corporation's misdeeds, we need to find out who led that organization at the time and make sure they hear what we think of them. If we buy their products, we need to stop buying their products. If we bank/invest with their company, we need to stop banking/investing with their company. If we blog, we need to say what we think about their behavior on our blogs. People who misbehave, whether they be congressional representatives or CEOs, must be held accountable.

No comments: