Bill Moffitt's Weblog

Wednesday March 16, 2005

Bernie Ebbers

So, if you believe Bernie Ebbers, he has been convicted for ignorance. He didn't know what was going on, MCI was a huge company, and a lot of things happen without his knowledge.

I actually agree with him on that: a CEO cannot and should not know everything going on in the organization.

However, the most important job of a CEO is to set the tone and expectations at the highest level of ethics and legality throughout the organization. The CEO can't know everything that's going on, but he or she has to make it clear that malfeasance will not be tolerated and make his or her actions back that up.

Whether he knew about the specific fraudulent activities or not, he was criminally negligent in his responsibility as the leader of the organization. Given that the jury deliberated for 8 hours, I think that the jury agrees that the crime isn't not knowing what's going on; they convicted him because he's a bad leader.

I hope that this case is a referendum for top executives: leadership matters, because winning isn't the only thing that counts; you have to win clean. If you tell the group, "just win, however you have to do it," there are a lot of people who will do just that, and you'll have an atmosphere in which cheating is the norm. Now, if you lead that way, you'll go to jail.

Just like Bernie.
(2005-03-16 11:53:32.0) Permalink Comments [5]