Should CEOs Be Held Responsible for Setting America’s Moral Tone and Social Compass?Published: September 14, 2006 in Knowledge@Emory
In Leo Hindery Jr.’s book It Takes a CEO: It’s Time to Lead with Integrity, the well-known and former head of the YES Network and AT&T Broadband takes American CEOs to task and provides an in-depth analysis of what the top post should entail. Of course, a book deriding the malevolent and greedy pursuits of corporate top brass, from convicted John Rigas at Adelphia Communications and Ken Lay of Enron, aren’t new, and neither is a book prescribing the solution to these ethical and criminal lapses.
However, Hindery’s text differs from the pack in that he is one of the few CEOs to spill the dirt on his own kind. (Today, Hindery serves as managing partner of InterMedia Partners, a major private equity firm.) By virtue of his resume, he sits in a position of authority on the subject. Hindery also understands the psyche and the cult of personality revolving around the position of CEO at the Fortune 500. He reasons it is an enviable spot—one that comes with tremendous power, influence, perks, cash, and, first and foremost, responsibility.
Because CEOs do hold so much power and influence, Hindery argues that there should be a concerted effort to positively impact the lives of Americans. He states, “I have a vision that I savor: the CEOs of this country’s thousand largest companies band together, storm Capitol Hill, and declare their collective determination to launch the equivalent of a Marshall Plan to help rescue the U.S. economy and its middle class.” He calls business leaders to task for not addressing the unemployment rate among African-American men. Hindery also believes that rising healthcare costs and the increasing numbers of uninsured Americans could be resolved by this “collective” CEO power and wisdom.
But besides the issue of unemployment and healthcare, he says that “corporate leaders have to take more responsibility for this nation’s moral tone and for the quality of our cultural and social discourse.” These are strong words, and Hindery believes that instead of helping America improve, CEOs routinely curry favor with politicians to ease up on corporate taxes and outsourcing restrictions. This is a tale of using one’s power for good and not for the purposes of evil, and Hindery does run the risk of sounding like a fire and brimstone preacher of the corporate boardroom.
However, considering his authoritative tone and considerable real world examples of corporate leaders gone astray set against those doing the right thing, this book becomes a must-read for the modern CEO and anyone looking to eventually head up a company. (He devotes a full chapter to the errors of Wal-Mart, from undermining smaller stores to the large retailer’s mistreatment of workers. While Wal-Mart has taken its shots as of late, few CEOs have come to the forefront to take the retailer to task. This speaks to the inner sanctum mentality that governs the CEO of today—a post far removed from the day-to-day plight of most Americans.) Interestingly, Hindery also argues against excessive CEO pay, and reasons that there is no way to motivate workers when wealth is distributed so disproportionately at U.S. companies. Few could argue with this statement.
The author believes that CEOs need to take a courageous stance and look toward the long-term goal. He faced enormous criticism in 1997 when, as the president of cable operator TCI, he ended the broadcasting of the tremendously profitable pay-per-view extreme fighting events, since Hindery found these shows to be “perverse and obscene.” His words are strong, as he calls modern day executives lazy and cowardly in their ethical response on the job. Hindery blames CEOs for helping to bump up the “misery indexes” for most U.S. workers, and he argues that the shaky economy needs to be addressed. Hindery isn’t a fan of outsourcing, and his comments might sound rather protectionist for most business leaders. But, he argues that he is merely looking for a leader with a more creative vision, and when he presents the examples, the reader is won over to his side of the argument. For example, he says that novel ideas can result from forward thinking CEOs such as JetBlue’s David Neeleman, who uses a number of at-home reservation agents here in the U.S. to cut office costs.
Hindery even calls to task the federal government for continually slashing interest rates in recent years, which in turn freed up cash to business. Corporate America responded irrationally, he argues, by building up to the point of overcapacity—from the airlines to the auto industry to the telecom sector. He also argues against tax cuts to the wealthy, and instead, champions the plight of the average American worker. His point is that while government worries about keeping inflation at bay, the issue of unemployment is a bigger dilemma facing the U.S. He laughs, “The theory is that free trade will set us free.” The author also lays out the failings of deregulation in the airline, utilities, and telecom industries—from the extreme level of industry consolidation resulting in a lack of reliable service and the various real costs passed on to the consumer or company employee. Hindery is the rare business leader to stray from the capitalist party line.
He reasons that the CEO spot is one of privilege, but that it is also one that requires trust. Hindery despises modern CEOs, “sashaying around like pop stars.” He even pinpoints the moment when the CEO spot officially moved into this realm of regal status—“the publication in July 1986 of Lee Iacocca’s self-aggrandizing autobiography Iacocca” signaled the official crowning of the U.S. CEO. However, he says that there needs to be a “concept of stewardship” involved with the post. Hindery argues that the CEO’s constituency—shareholders, employees, customers, community, and industry—must all be taken into consideration. Today, of course, shareholder influence moves Corporate America. Considering the recent spate of criminal and moral lapses of some of the nation’s top-level executives, often for stock manipulation purposes, there is certainly a need for an honest discussion of the attributes required for an effective, ethical, and committed CEO. Hindery’s sweeping book provides a wonderful way to start the discussion.