The Ramifications of Leadership (or Lack Thereof)

What do OSHA, the FDA, Labor Unions and Sarbanes-Oxley all have in common?  They all came into being because of a catastrophic failure of leadership and absence of ethics in business.  The reasons each of these pieces of legislation came into being were not caused by the failure of capitalism as a system, but rather by the greed, indifference and corruption on the part of business leaders – including those from some of our largest and most well known corporations.

The Department of Labor’s web site states that “The Occupational Safety and Health Act of 1970 (OSHA) heralded a new era in the history of public efforts to protect workers from harm on the job. This Act established for the first time a nationwide, federal program to protect almost the entire work force from job-related death, injury and illness.”  Why were these public efforts required?  Because corporations were not doing enough to adequately protect their own workers (why would they not willingly protect their human assets?), and because they would not establish a private sector form of governance that would perform a function similar to that of OSHA.

The FDA’s budget is about $3.25 billion annually, OSHA’s is approximately $.55 billion annually, and Sarbanes Oxley enforcement was over $6.0 billion in 2006 (as a former Board appointed public company Interim CEO and a 17 year public company outside Board member, I can attest first hand to the cost to corporations of Sarbanes Oxley).  Our unwillingness in Corporate America to govern ourselves and exhibit leadership that promotes ethical dealing has placed a staggering burden on businesses and the American public, not just in terms of dollars but also in terms of a debilitating loss of the public trust.

Lest we think the failed leadership and its fallout occurs only in Corporate America, consider the current debacle with the No Child Left Behind legislation.  A well intended piece of legislation designed to spur academic achievement by financially rewarding public school systems that met certain testing criteria. However too many public school districts decided they couldn’t tolerate not receiving the anticipated funding, so they decided to “game” the system by cheating on test scores.  In Atlanta at least 178 teachers facilitated cheating on test scores, some under threats of reprisal if they did not comply, and all under the auspices of Atlanta’s public school leadership.  The cost to education and beyond due to that leadership failure will be staggering.

Some questions we should be asking ourselves are: As a corporate executive, what can I do to exhibit good leadership?  How do I keep from succumbing to the pressure to compromise ethics?  How do I best cultivate leadership and ethics throughout my organization?  How do I monitor my leadership/ethical requirements to make sure they are being followed?  Does my company have an independently monitored whistleblower policy?

Refer back to Company Health Check for additional ‘best practices’ criteria.

Introductory Blog

Welcome to Business Development Associates Inc. (BDA) and our introductory Blog. We are excited to be able to offer what we hope you will find to be a valuable service, and a Blog you will want to follow on a regular basis.

Each Blog will discuss a topic that we trust will be regarded as relevant and that will be no more than three to five paragraphs in length. So a pretty quick read. And each Blog we write will either be a topic we have deep experience with and will be informational in nature or will be a topic that is designed to stimulate your thinking and hopefully generate feedback.

We will likely start with topics listed on the Company Health Check Page of our web site. Why, and why is that page on the site? Because if a company isn’t willing to deal effectively with the macro issues like those noted, it’s going to be very difficult to get the micro issues at the right level on a sustainable basis. And the page is there because companies need to be constantly assessing their level of excellence with respect to each of those issues. So we provided a reminder for them to do so.

So what we will be talking about relative to those Health Check Topics are the good and the bad we have seen through the years, as both consultants and as operating management. Why the good and the bad? Simply because it’s possible to learn from both.

Stay tuned!!