How much ethical leeway are people willing to give business leaders these days? Judging by the public fury over American International Group’s employment retention bonus fiasco, the answer is less than one-tenth of 1 percent. AIG had the audacity to pay top executives $165 million in bonuses earlier this month after receiving $173 billion in taxpayer bailout funds.
While the total amount of the bonuses equates to just .9 percent of the bailout monies AIG received, the resulting outrage should serve as an ethical barometer for all leaders. To give you perspective on how small a figure it is, think of comparing a dime to a $100 bill.
Public indignation toward AIG is intense. Responding in a drastic way, the U.S. House of Representatives overwhelmingly passed a 90 percent tax on the bonuses in order to recoup the money. One angry senator was barely joking when he suggested that any AIG executive who accepted a bonus should consider committing hara-kiri. And so far, twenty states have launched investigations into the AIG bonuses. Amid the aftermath, AIG board chair and CEO Edward Liddy stated, “I think the AIG name is so wounded and disgraced, we’ll probably have to change it.” All this trouble over one-tenth of 1 percent.
The lesson for leaders at all levels — and in all companies — is that public tolerance of unethical business behavior is at an all-time low.
Never-ending stories of executives who overstate corporate earnings, divert company funds for personal gain, use questionable accounting practices, backdate stock options, and obstruct justice have taken their toll. People expect leaders to have integrity, and they’re running out of patience for leaders who don’t have any.
Indeed, for most of us, leadership integrity is not about keeping our hands out of the till; it’s about keeping true to our organizations’ values. Employees expect their leaders to live up to the values listed in their companies’ mission statements. When leaders fail to do so, workers will only be lenient up to a point. Based on recent headlines, I’d say you have less than one-tenth of 1 percent of leniency to work with.
Are you working in an environment where it is easy to live with integrity toward your organization’s values? Are you living up to your own personal values? How are today’s headlines making you think about your own personal behaviors?
