Lang Strategies LLC

Barbara Lang: Ethics deserve a starring role in business dealings

Ethics deserve a starring role in business dealings

They created cultures of fear, deception and arrogance, and they put their own personal interests in front of all others, including their own families. They didn’t care whose lives they destroyed, using their power to conquer and destroy anyone blocking their path to money and gratification. Shockingly, they manipulated those around them — people with whom they built trust — to foster networks of secrecy and allegiance beyond anything we have seen in the history of American business. Ironically, they crucified themselves through historic cheating, lying and a breakdown of ethics never seen before.

Many are household names, and we should all cringe when we hear them, even as they are reduced to insignificance and confined to moldy jail cells. Ken Lay, CEO and chairman of Enron, was the mastermind of a historic accounting scandal at the energy company, resulting in its bankruptcy. He was found guilty of 10 counts of securities fraud before he died in 2006. There are also the two infamous Bernies: Ebbers and Madoff. Ebbers, the former WorldCom CEO, was convicted of securities fraud and conspiracy as part of that company’s false financial reporting scandal. Maybe the most egregious and sinister of them all was Madoff, whose Ponzi scheme defrauded innocent investors of millions of dollars and life savings. He rots in federal prison while his clients try to make sense of the destruction he knowingly caused.

Unfortunately, the list goes on and takes many forms. We’ve seen examples locally as well. Former D.C. Councilman Jack Evans, a key ally of the D.C. Chamber of Commerce when I was president and CEO and a leader in the District, recently resigned from office after facing numerous ethics violations that benefited his personal interests. Evans recently decided to run for his old seat, which is not enough time to heal the wounds of his misdeeds. Just up the road in Baltimore, former Mayor Catherine Pugh resigned from office last year for an alleged scheme involving the sale of thousands of copies of a children’s book she published. Many of the book’s sales went to organizations with ties to her or that hoped to do business with Baltimore. This was a major conflict of interest and the leader of a major American city should know better. She was recently sentenced to three years in prison, an appropriate sentence for her indiscretions, and hopefully she can eventually make it up to the citizens of Baltimore.

Ethics lapses are often considered victimless crimes. But that is a naive and lazy narrative because all types of these activities have consequences. Using public office for financial and personal gain stains credibility and lessens the impact leaders have on behalf of their constituents. Lies to staff and constituents breeds contempt and animosity. While no one is physically injured, there is still irreparable damage.

Money often breeds power, and that can lead to greed and clouded judgment. Insider trading to gain an edge on business deals and stocks impacts the very fabric of our economic system of free and fair trade. Leaders using corporate or taxpayer monies to fund lavish lifestyles in private jets and luxury penthouses is not an entitlement, but a crime created by enabling a culture of deceit right under people’s noses.

How did we get here, and what can we do to neutralize this abhorrent behavior? Most corporate entities offer ethics training, often online. This is not enough and simply checks a box. We need our business schools to teach ethical behavior from the beginning, integrated into curriculum just as marketing, operations and finance are. Human resources departments must also screen for ethics early in the interview process and implement annual recertifications to ensure regulations and laws are understood throughout the organization.

It’s time to stop these acts of ethics violations from polluting our business environment. Laws must be enforced and punishment, harsh. Hit these criminals where it hurts — their pride and bank accounts — and let those who operate by the books thrive and serve as the role models for doing business the right way.

Barbara Lang is managing principal and CEO of Lang Strategies, a D.C. business consulting firm. She is former president and CEO of the D.C. Chamber of Commerce.