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Early risers challenged to confront wrongdoing in business


It was still dark outside when 200 business leaders, professors, MBA candidates and undergraduate business students set out for a 7 a.m. breakfast meeting with Charles Denny Jr. The retired CEO of ADC Telecommunications and former marketing manager at Honeywell challenged them to step forward and protest aberrant behavior in the corporate world.

The early risers were attending the monthly Faith and Work series last month in St. Olaf Church in downtown Minneapolis. They applauded when Denny said that he was “seriously disappointed by the lack of public voice” among executives to the moral breakdown occurring at Enron, WorldCom, Tyco, Adelphia, Sunbeam and many other firms. Leaders in the business world have shown “they avoid taking action before there is an accusation of wrongdoing. …

“Most of us don’t like confronting our peers. We don’t speak up to our kids, afraid to offend them or lose their love. Disapprobation and disapproval are foreign to us,” Denny said. But the Enron debacle was not simply the handiwork of Kenneth Lay and a few executives. “It was the failure of society at large,” he said.

Denny parceled out the blame to Enron’s auditors, its legal counsel, government regulatory agencies, Congress -- swayed by campaign contributions -- and the Enron board of directors.

Corporate governance and potential corporate corruption begin with the selection of the board of directors, Denny said. At Enron, the board included academics, doctors, ex-government officials and businesspersons, some of whom had “blatant conflicts of interest” and failed to exercise their supervisory powers with diligence, he said. The lesson, he said, is that a board of one’s peers is not the best protection for the public.

The board has the right to demand a measure of performance from the CEO, who is the board’s agent in the firm, he said. Release of performance reports to the public is a necessary step in keeping CEOs responsible.

Denny knocked the “star system,” which the media helped boost in the ’90s, creating “the cult of the infallible CEO.” These were “people we’d be lucky to see in the distance, much less touch,” he said, and whose salaries we coveted. Such ratings are “nonsense” in the corporate world. Every executive is a team player and every CEO makes mistakes, Denny told NCR. “I was carried on the backs of others.”

CEO rates of pay that in some cases are 400 times greater than worker pay are also nonsense, he said. But Denny believes that executives ought to be well paid for making hard decisions, facing problems with no clear-cut solutions and with lots of implications. Al Ca-pone, the gangster, earned twice what President Hoover did, he noted.

“If you’re well paid, you should have the courage to face difficult issues. No one is dragooned into being a CEO. You put your hand up.”

Denny urged his audience to become value-setters in the workplace, establishing policies that promote fairness and creating checks and balances that “assure that what is described in the values is practiced.” In the absence of self-regulation, government will act to set standards, he warned. “Law makers can’t rewrite laws fast enough to accommodate all the aberrations in corporate life.”

Asked whether prayer and spirituality have a place in the corporate arena, Denny, a Catholic, said he was “nervous” about suggesting how people should live their lives. But he was also uneasy with the claim by many CEOs that their personal behavior can be separated from their executive and professional role.

“Whether a supervisor or a CEO, we all have a definite influence on those with whom and for whom we work. We follow the leader,” he said, adding that leaders whose values are foremost offer the best chance for a principled workplace.

Denny is “reasonably convinced” that most business leaders subscribe to certain common values and have a “solid, if unarticulated moral core.” But often they are afraid to use the power of their office, which comes from others, to speak out for fear it will affect their business. Where there is aberrant behavior, business leaders need to regulate, he said. “We can’t let these guys run riot.”

Denny urged courage in citing and fighting corporate abuse. “No one gets up in the morning aspiring to be average, but we all have feet of clay.”

Michael Naughton, director of the John A. Ryan Institute for Catholic Social Thought at the University of St. Thomas in St. Paul and Fr. John Forliti, pastor of St. Olaf Church, co-founded the breakfast series nine years ago. Naughton and 25 of his undergraduate students came to hear Denny.

Paul Samargia, a computer information systems major, found it “interesting that there are people in the business world who care about corporate ethics.” Travis Thooft, who is scheduled to graduate in business in December, hoped that the current “crisis will produce some good and scare companies back to higher standards.”

Denny’s advice to students: “The business world is a good place for you to spend your life and follow your professional vocation. There is a sea of possibility in which you can swim. You can speak up or not. You can confront evil and take the consequences,” he said, adding: “The consequences are never fatal, only inconvenient.”

National Catholic Reporter, October 25, 2002