Wednesday, March 21, 2018

Mark Zuckerberg: Facebook’s Unjust Strategic Leader in a Crisis

Mark Zuckerberg, founder and CEO of Facebook (and Instagram) “remained silent” during the two days after the data-breach scandal broke in March, 2018 as E.U. and U.S. lawmakers “pummeled Facebook and its stock price” dropped 9 percent.[1] The company lost $50 billion in market value in just those two days![2] Beyond the self-interested investors and the demoralized employees, the company’s 2 billion users—the suppliers of the raw content (to be mined as well as shared)—and the world (i.e., societal level) looked for ethical (i.e., atoning as well as protective) leadership from the company’s CEO. To be just, I submit, the leadership could not have been a mere reflection of Zuckerberg’s or Facebook’s immediate self-interests.
When users had “complained about bugs and problems with Apple Maps app in 2012, Tim Cook, the company’s chief executive, released a statement that said ‘we fell short.’”[3] Even though releasing a statement is more managerial than associated with leadership, the contrition evinces an ethical tone as he held his own (and Apple’s) immediate self-interest at bay. In contrast, Facebook’s faceless statements in the wake of the psychological-political personal-data breach stressed that Facebook had been blameless.
In 2011, “when Netflix tried to split off its mail-order DVD business into a company called Qwikster, its chief executive, Reed Hastings, wrote a letter to the public. ‘I messed up,’ he [wrote]. ‘I own everyone an explanation.’”[4] Hastings’ credibility was boistered by his voluntary assumption of responsibility. Evading the problem would have signaled a lack of leadership, as would have an eventual explanation blaming other companies or people.
Even at Uber in 2017 when “a former engineer revealed a pattern of sexual harassment,” Travis Kalanick, the company’s CEO, informed the public that “he would immediately open an investigation.”[5] Even in a sordid corporate culture, leadership can be shown by taking the proverbial bull by the horns rather than going into hiding until the worst of the storm has passed. It is hardly surprising, given this comparison, that some employees at Facebook tried to jump ship in the wake of the scandal, citing the “demoralizing” nature of their work on Facebook’s main product.[6] Those employees could have used an ethical leader, but Zuckerberg was AWOL internally too.
I suspect that Zuckerberg evaded assuming a leadership role inside the company and societally in the wake of the scandal because his calculating mind was on how to carefully craft a public statement designed in line with his (and his company’s) immediate and long-term self-interest. In his eventual statement, although he admitted that Facebook had made mistakes, he "stopped short of a full-throated apology and was at times defensive."[7] He insisted his company was taking steps to protect its users' data from being harvested. Yet it took a whistleblower for Facebook to react (including admitting to the breach), and years earlier, Zuckerberg had made the same promise. Could he be trusted again, especially considering his track record in favoring investor over user interest?
Zuckerberg used his interview on CNN on March 21, 2018 to try to reframe the issue two degrees of separation from Facebook to Russian meddling. A leadership vision that has another party as principal bad guy is not ethical when the issue on the table lays culpability at the leader's own door. Furthermore, the pivot evades, and thus confirms any determinations that he and his company are not to be trusted.  
Strategic leadership, moreover, lacks credibility for employees and especially societally if the vision component is a mere reflection of the organization’s immediate and even medium-term financial interest; the long-term interest is more in line with a societally-valued vision.[8] For a leadership vision to establish, maintain, or bolster trust beyond an organization at the societal level, the values in the vision must resonate with societal values. This idea itself resonates with Plato’s notion of justice as resonance between a well-ordered (i.e., reason controlling passions) polis (organization or city) and well-ordered psyches (i.e., the human mind). Applying this theory to strategic leadership, I contend that a (societally-recognized) just strategic leader utilizes reason to hold the temptation of (self-interest) strategic interests back from dominating the crafting of a leadership vision such that it can be valid societally. The just strategic leader reasons that accepting discomfort rather than evading the spotlight in a crisis is in a company’s best long-term interest, and that damage-control to defend oneself and the company against the immediate attacks actually evinces weakness, ethically and otherwise. The unjust leader (and organization) insists that a vision is valid societally even though it is actually “window-dressing” to advance strategic interests or protect them. I submit that Facebook’s Zuckerberg was oriented to the latter in the wake of the crisis, and more generally to the advancing the ultra-specific interests of Facebook’s investors (rather than the users who supply the content).

Employees look for leadership in the midst of a demoralizing crisis. (USA Today)

See the essay "Facebook: A Distrustful Company."

See also the booklet, "Taking the Face Off Facebook."

1. Jessica Guynn, “As Facebook Reels from ‘Catastrophic Moment’ in Cambridge Analytica Crisis,” Mark Zuckerberg Is Silent,” USA Today, March 21, 2018.
2.  Kevin Roose and Sheera Frenkel, “Missing From Facebook’s Crisis: Mark Zuckerberg,” The New York Times, March 21, 2018.
3. Ibid.
4. Ibid.
5. Ibid.
6. Ibid.
7. Sheera Frenkel and Kevin Roose, "Facebook's Mark Zuckerberg Vows to Bolster Privacy amid Cambridge Analytica Crisis," The New York Times, March 21, 2018.
8. Skip Worden, “The Role of Integrity as a Mediator in Strategic Leadership: A Recipe for Reputational Capital,” Journal of Business Ethics, 46 (August, 2003) No. 1, pp. 31-44.

Monday, March 19, 2018

The Founder of Theranos: A Flawed Charismatic Vision and Leader

“Theranos rose quickly from being a college dropout’s idea to revolutionize the blood analysis industry to a hot tech bet that accrued $700 million in funding and many famous names for its board.”[1] Elizabeth Holmes, the company’s founder, was stripped of her position at the company in 2018 after the SEC discovered her deep involvement with the fraud at the company. Her “smarts, fierce determination and Steve Jobs-inspired look . . . were critical” to her being able to perpetuate the lie that the company had a device that could do blood tests with just a scant amount of blood, obviating the unpleasant experience of having blood drawn by needle.[2] Although Jack Welsh, Bill Gates, and Steve Jobs accomplished enough to warrant their fame, I submit that companies are too prone to create “champions”—even strangely calling them “rock stars.” In other words, even though charismatic vision is of value to a business, neither such a leader nor his or her vision itself should be overplayed. Business, I submit, has a marked tendency to do just that, and often with impunity.
At 19, Elizabeth Holmes dropped out of Stanford University because she had an idea of how blood tests could be done without the need of so much blood that a needle is required. She was “determined to create a company that would help anyone who, like herself, was afraid of needles and dreaded taking blood tests.”[3] Where the school Northern Illinois University or the University of Arizona, her decision to drop out for such a reason could be reasonable, but to give up a Stanford education so people wouldn’t have to feel a needle for “blood work” indicates a flawed judgment. Where were her parents? She was 19! Finish college then start your company. That it took her a decade of work before she debuted her company—and even then without the requisite technology—suggests that there was no rush. Simply out, it is very odd that she dropped out of Stanford. Yet this point was somehow missed by investors such as Rupert Murdock, Cox Enterprises, and Walgreens, and board members including George Schultz and Henry Kissinger, former U.S. Secretaries of State,  former U.S. Senator Sam Nunn, former Secretary of Defense William Perry, and the current Defense Secretary James Mattis. Did they all show up drunk at board meetings? Was there even an audit committee that reported directly to the board?
Clearly, we can be dazzled by celebrity, and the famous can cash in on their reputations. That no flags were raised concerning the founder raises larger questions in business related to the troublesome transfer of power and position from charismatic founders to managers. Investors should not rely on the charisma of founders; even the promises of Bill Gates and Steve Jobs warranted being independently checked out. CPA firms should not have to rely on founders, or even managers, for renewals. Business, in other words, can easily get too cozy, leaving investors out in the dark.
In terms of leadership, charismatic vision should be distinguished from the implementation of strategy. I’m not even sure “avoiding needles” is big enough to warrant being reckoned as a vision. Founders and managers alike may distend what are actually good ideas into charismatic vision.[4]
In conclusion, the background of Theranos, including that of its founder, should have raised red flags. Likening her to Steve Jobs because she wore black turtle-neck shirts borders on the ridiculous, and yet a self-aggrandizing company can easily get on that band-wagon, ignoring the hypertrophy. Leadership vision is valuable, but in a business context the vision thing must be related to concrete strategies, with realizable benchmarks. This is not to say that leadership vision should collapse into strategic interests, for such reductionism rids the vision of its own integrity and coherence.[5] The point is not to get carried away with charismatic vision in business even as such vision should not reduce to strategy.

[1] Marco della Cava, “Behind the Scenes of Theranos’ Dramatic Rise, Fall,” USA Today, March 16, 2018.
[2] Ibid.
[3] Ibid.
[4] On leadership vision, see Skip Worden, The Essence of Leadership: A Cross-Cultural Foundation
[5] Skip Worden, “The Role of Integrity as a Mediator in Strategic Leadership: A Recipe for Reputational Capital,” Journal of Business Ethics, 48 (August, 2003) No. 1, 31-44.

Saturday, February 24, 2018

The First Multiracial U.S. President: Leadership as Personified Symbol over Political Advantage

Barak Obama had a tendency to modify his manner of speaking, and even his dialect, to fit with his audience. Listening to his speech to the National Urban League, I was stunned; early on, he pivoted off from his ordinary manner of speaking to speak in what was surely a more familiar way to much of his audience. The crowd loved it. The audience must have been looking at him as the first black US President. It occurred to me while listening to him and observing his strategy to connect to his audience that although there would be less political advantage in it, he could have run for president by presenting himself as multi-racial (technically, mulatto). To be sure, there were fewer multi-racial Americans who would have identified with him, but is that even the point? The multi-racial segment of the US population was small, but growing.  It already pointed to what most states would likely look like in fifty or a hundred years from 2010, when I heard the first multi-racial US President speak. Were he to have made explicit his multi-racial identity, he would have personified the leading edge of what America would become, and thus have served innately as a leader in his very person.  That is to say, he would have led through his person—as a symbol personified—as the a sign of things to come, transcending “black vs. white.”  Nature’s integration was already beginning make a dent in the artificial problem of racism far more than any government program or even a US President could, yet had Obama making the meaning of his symbol explicit would have helped Americans to know the transition already occurring in  their midst. Instead, he used his "Black identity" to solidify his base for political advantage.

Perhaps it is the tacit duplicity in a multiracial man permitting himself to be labeled as black for political expediency that lies at the core of why some people did not trust him (e.g., the “birthers”).  Such duplicity is like a subterranean fault-line undergirding the tension between campaigning for real change and then stocking people of the old guard, such as Larry Summers, in his administration.  The duplicity of promising systemic change then dropping his insistence on a public option and no mandate for health coverage—essentially guaranteeing a new mass market to the same health insurance companies that actively purged people with pre-existing conditionsresonated in the multi-racial man using the term “black” to identify himself publicly.  Barak Obama is as much white as he is black.  Were he to “run with this,” he would have instantiated a leader on the forefront, the  cutting edge of society, even though there was little political capital to be made on it.  

As an explicit multi-racial symbol, President Obama could have shown the world where America was headed, and that Americans were facing that future with heads held high, or at least with awareness. While perhaps not helpful in elections, such a function, which can only be done by the US President, was at the time sorely needed, given America’s image abroad. America was finally becoming the melting pot that had been proclaimed for so long—finally getting past the need for duplicity.  President Obama could have symbolized this in his person, and thus have done America a service far more valuable than any partisan legislation.

Presidential Leadership

In the wake of the failure of the joint congressional committee that was tasked with coming up with a proposal to reduce federal deficits over a decade by $1.2 trillion, Michael Bloomberg, mayor of New York City, said at a news conference, “It’s the chief executive’s job to bring people together and to provide leadership. I don’t see that happening.” The mayor may have been wrong. Take the word executive: literally it is to execute, or implement, which implies management rather than leadership. Put another way, implementation depends on a goal already established, presumably by a leader. To lead is to formulate a vision of social reality that is an ideal, and thus consisting of goals rather than actualities, and then to persuade others to accept that social reality. Once the directionality is established, the means, or strategies, can be executed by managers (i.e., those who manage the implementation).

Even Dan Pfeiffer the White House communications director at the time, may have conflated management with leadership in remarking, “A president’s job is to lay out a plan and then rally the country to that plan.” The word plan is key. A plan is a means to get from here to there. It is therefore not the same as a goal, which is only an end-point. So once again leadership, which is oriented to formulating and selling a vision, is being conflated with strategy, which belongs with management, which implements goals by making and executing plans. Pfeiffer went on to refer to the president’s $3 trillion deficit reduction plan, whose specificity renders it clearly within the executive purview of the chief executive, rather than the leadership function of the president. Whereas to preside is literally to sit before (from the Latin), which is consistent with formulating and selling a vision, to execute is to draw up (or have drawn up) specific plans and negotiate on the basis of them.

The U.S. Presidency is a strange bird in that it contains, among other roles, the leadership of presiding and the management of executing. It is no doubt a tricky business balancing these two hats (among others, such as commander in chief). If the chief executive gets too caught up in negotiating particular plans that require legislation, his leadership function can suffer, as can the separation of powers that is vital to the proper functioning of the U.S. Government. That is to say, if the chief executive becomes the chief legislator through his minute legislative-committee involvement, he has gone far beyond the minority role represented by his veto pen. That veto is a check on congressional legislative power rather than an encroachment on Congress’s main function. Therefore, the chief executive should not have been an active part of the “super-committee” on the deficits.

The plans that the chief executive draws up should be oriented to the post-legislative implementation, or enforcement, of legislation, with only advice given to congressional committees as per the minority role of the presidential veto. In a sense, the American President is both before and after the Congress; the leader’s vision is as though the tip of an arrow pointing where the country is to go, whereas the executive’s plans are means of implementing legislation, which is ideally in line with the leadership vision’s goals and principles. Admittedly, in a governmental system of separated powers, the broad directions and principles, strategies as laws, and executive plans are not necessarily in sync. Perhaps this is reason enough for the U.S. President to keep straight the distinctive functions of leading and managing.


Jackie Calmes, “Obama Weighed Risks of Engagement, and Decided to Give Voters the Final Say,” The New York Times, November 22, 2011. 

Thursday, January 11, 2018

A Megachurch Pastor and Sexual Assault: A Compromised Christian Leader

“A Memphis megachurch pastor received standing ovation during a church service on Sunday after he admitted that he had engaged in a ‘sexual incident’ with a high school student 20 years ago in Texas.”[1] That the woman had made the man’s prior misdeeds public just days before throws into doubt whether the pastor deserved the ovation by his loyal flock. Prompted by the firing of Matt Lauer, the anchor of NBC’s “Today” show, the woman emailed the pastor more than a month before his public acknowledgement at his church; he had not responded to the woman’s email to apologize. Letting his flock in on the secret hardly added much value to the man’s character, for damage-control is not laudatory. The standing ovation connoted not only praise on the man and a revalidation of the pastor’s continuance as a religious leader. That a Christian leader could be validated as such, rather than invalidated and thus shown the door, throws into question the integrity of religious leadership itself.

1. Matthew Haag, “Megachurch Pastor Admits to Illicit ‘Sexual Incident’,” The New York Times, January 10, 2018.

The full essay is at "A Megachurch Pastor as a Christian Leader."

Monday, November 27, 2017

Christian Leadership Navigating Geopolitics: Pope Francis in Myanmar amid Ethnic Cleansing

With the U.N. having “denounced the murder, rape and pillaging of the Rohingya in western Myanmar as ethnic cleansing,” Pope Francis had to “strike a careful balance” during his visit to the country in late 2017 “by maintaining his moral authority without endangering his tiny local flock.[1] Even the decision to meet first with Gen. Min Aung Hlaing, the commander of the military that had “driven more than 620,000 Rohingya Muslims out of the country” could be taken as a compromise of the Pope’s moral authority because Francis would met with the Nobel Peace Prize laureate and de facto leader of the government, Daw Aung San Suu Kyi, the next day.[2] That the local Cardinal had urged the Pope not to even use the word Rohingya during the visit pointed in the direction away from the Pope acting as a moral compass and thus to a hit to his reputation as a leader of principle rather than expediency.

The full essay is at "Pope Francis as a Christian Leader."

1. Jason Horowitz, “Pope Francis Arrives in a Myanmar Tarnished by Rohingya Crackdown,” The New York Times, November 27, 2017.
2. Ibid.

Wednesday, November 15, 2017

Client-Centered Ethical Leadership: A Recipe for Trust at Goldman Sachs

With its incentive-structure that rewards a quick profit on the next trade even at the expense of advising clients in line with their long-term interests, Wall Street has its work cut out for itself even in maintaining trust, which, after all, is the basis of a market. On March 15, 2012, the New York Times reported that over all, “the percentage of people who have little or no faith in the fairness of investment companies rose to 41 percent in 2011 from 26 percent in 2008, according to Yankelovich Monitor 2011.” Even banks and insurance companies fared better, and household income played no role in the findings. At the time, Goldman Sachs was doing its industry no favors in terms of reputation. Indeed, the “best and the brightest” on Wall Street had created or enabled a rather narrow and self-serving corporate culture and a lack of ethical leadership that could otherwise turn around the bank by transforming its dysfunctional culture.

For support, I am not going to use the SEC investigation into fraud at Goldman (a case which the bank settled without admitting wrongdoing), or to the findings of Sen. Levin’s committee in 2010. Nor am I basing my conclusions on a Delaware judge’s criticism of the bank over the multiple and potentially conflicting roles it played in brokering an energy deal. I not even going off the charges made by the hipsters in Occupy Wall Street movement. Rather, I have in mind what is in my judgment an honest report made publically by a well-placed insider in Goldman—something that is exceedingly rare and thus potentially extremely enlightening.

In his stinging opinion-piece in the Wall Street Journal on March 14, 2012 issued just shortly after he resigned from Goldman Sachs, Greg Smith excoriated the bank where he had worked for twelve years, accusing it of moral turpitude if not sordid, short-sighted, greed. “To put the problem in the simplest terms,” he writes, “the interests of the client continue to be sidelined in the way the firm operates and thinks about making money.” He describes meetings in which the clients’ interests did not even enter into the equation. In fact, according to Smith, the grandson of Lithuanian Jews who had emigrated to Johannesburg, at least five of the executive directors at Goldman regularly refer to their clients as muppets. I suppose this means that the clients are deemed so stupid they can (and should) be easily controlled or managed by their “advisors” at Goldman, who are evidently the smartest kids in the room.

Even as government investigations and a protest movement can get far more press, an essay by an insider can be far more enlightening in terms of what is really going on behind a bank’s mission statement. Undoubtedly aware of this point, Lloyd Blankfein, the CEO at Goldman, and Gary Cohn, the bank’s president, referred in a letter to employees to Smith as “this individual” and to his essay as “an individual opinion.” Lest it be forgotten, leadership too is associated with individuals. Ironically, Smith rather than Blankfein and Cohn was exercising leadership—even ethical and I would say transformational leadership as against a ploy to deny and discredit in order to retain power. Leadership does not reduce to power. Indeed, the ethical, transformative leader must risk it, and Smith—being persona non grata on Wall Street—certainly risked more than that in having his essay published.

One Wall Street executive said it was “unforgivable” for Smith to make his opinions so public; rather, he should have taken them privately to the firm’s senior managers. However, he had doubtlessly done so only to be ignored, given the weight of the bank’s culture going against him. Indeed, as a middle-level manager, his complaint would not have gained much play. So the Wall Street executive’s advice can be rendered as enabling a dysfunctional corporate culture rather than being constructive. Ethical or transformational leadership cannot contravene the logic of power in a firm’s hierarchyand thus the intervention must be top-down rather than bottom-up.

As an alternative to ethical leadership, relying on customers to discern that they are not being adequately served and thus decide to leave may be advocated by others on Wall Street as the best solution as it makes use of the market mechanism. Thanks to Sen. Carl Levin’s committee, it was already widely known that at least one issue of the sub-prime-mortgage-based derivatives being sold by Goldman was referred to in internal emails as “crap.” The customers to whom it was sold had no basis to know that it was crap, or that Goldman’s sales people thought it was crap. It is not as if the marketing included: Tell the prospective customer that the security is crap. Perhaps the only customer buying that line would be a former governor of Alaska who could see Russia from her house.

Moreover, selling “crap” to “muppets” reflects not only a blatant disregard for customers, but also a marked level of disrespect of those who are ostensibly being served. It is as if the emails had read: “We could serve the idiots dog food and they wouldn’t know any different.” It is from such a haughty place that even the powerful today can fall so far and so unexpectedly fast. Yet it is not clear to me how many of Goldman’s muppets would walk from superior returns, if indeed Goldman has been out-performing its rivals, out of an overriding sense of self-respect. One would think that customers would prefer bankers who have their backs, but some undoubtedly believe in buyer beware (caveat emptor) and virtuously apply the strict doctrine to themselves as if in a Calvinist fit of self-discipline. The trade-off between even short-turn returns and self-respect is itself within a rather sordid corporate culture, and for it to be changed I think we need to consider the prospects for ethical, transformative leadership at the upper-echelons of the bank rather than rely on brave middle-managers or external protestors, investigators, or even customers. To make this case, I need to point to the salience of a firm’s culture—and in particular its ethical dimension.

Lest a firm’s culture be thought to be of marginal significance from the standpoint of the firm as a going concern financially, Smith attributes Goldman’s culture of yesteryear, which “revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients,” as the “secret sauce” that made the place work as a credible and trusted investment bank that thrived financially.  To be sure, the fact that partners had their own fortunes on the line gave them an incentive not to risk losing established clients by undercutting them by a focus on short-term profit über alles. Even so, a bank’s culture can play a large role in whether short-term or long-term greed is the order of the day. According to Gus Levy, who led Goldman Sachs in the 1960s and 1970s, with long-term greed, money was made with clients, not from them. Deciding whether to include or relegate customer interests is a decision or value that spreads like wildfire through an organization. This occurs by means of the organization’s culture. If Smith is correct, the culture at Goldman came to include a lack of regard for customers, or muppets. Because the customers were expecting that their interests would not only be considered, but also emphasized, Goldman’s violation of its corresponding obligation means that the ethical dimension of the culture is particularly salient here.

Lest the moral quality of a firm’s culture be presumed to be an unimportant element of a firm’s culture, Smith makes the startling claim concerning what had come of the bank’s culture: “I truly believe that [the] decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.” A single-minded effort to make money even at the expense of a customer’s immediate interests, such as in selling crap to muppets, turns out not to be a good strategy. Indeed, it is unethical. Indeed, I have been surprised at the positive correlations I have found in hearing of unethical companies, such as Days Inn for instance, being also not very competent, at least at the retail level. Unethical people tend not to be very good at their day jobs. Perhaps a character flaw is the common denominator behind unethical conduct at the expense of customers and incompetence.

However, Goldman Sachs has been financially successful even if its culture and leadership have been rather squalid. To be sure, Smith claims the bank is on borrowed time, given its lack of regard for its muppets. “People who care only about making money will not sustain this firm—or the trust of its clients—for very much longer,” he writes. In any case, the bank could doubtlessly be much better shape financially were ethical leaders installed who did not have such a vested interest in the extant dysfunctional culture.

Smith points the finger principally at Lloyd Blankfein, the sitting CEO who had bragged that Goldman was doing God’s work and yet defensively tried to discredit Smith as only an “individual.” More generally, Smith points to the dearth of ethical leadership at the bank. “The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.” Leaving the reference to axes aside, Smith’s point is that the ethical dimension of a firm’s culture is very important to the firm’s financial survival, and that ethical leadership is vital for the dimension. Culture, ethics, and ethical leadership are like a pyramid of sorts with the top setting the tone (and rewarding it). Promoting people for unloading toxic securities on unsuspecting muppets is not the way to build ethical leadership, and thus an ethical culture. Lest all this be reduced to practices of questionable legality—as if business ethics reduced to business law--Smith reports no such impropriety. The fatal flaw in Goldman Sachs is moral rather than legal.

If only the problem were legal in nature. Smith’s prescription is much more difficult to implement than catching cheats: “Weed out the morally bankrupt people, no matter how much money they make for the firm. And get the culture right again, so people want to work here for the right reasons.” This medicine attacks the extant culture itself, which, after all, is based on making money for the firm. Unfortunately, the effort must come out of that culture. Therein lies the rub.

How to interlard ethical leadership even at the board level in the midst of moral turpitude is to ask something to renounce what it is in order to become the opposite. Cultures normally resist that sort of thing. The board would have to be sufficiently distant from the managerial culture as to be willing to expunge the extant tip of the managerial iceberg and replace it with an ethical leader who is known as a change agent. It might be that the chair of the board must go to stockholders for support in order to make changes in the board. In any case, a new CEO, one taken from afar rather than even from stakeholders, would be necessary. Once installed, he or she would have to work downward, rooting out the rot; this cannot be done from the middle-level of management. In fact, opposition can be expected from throughout the management structure. Bringing in a powerful change-agent (preferably an ex-marine) in human resources, such as the guy O’Neal brought in at Bank of America, could help the CEO systematically find and extract elements of the old culture and quickly replace them with new, solid oak. That would be God’s work, borne of ethical rather than defensive leadership. The clients would come to appreciate it and reward the visionary victors handsomely, whether in terms of bonuses, profits, or dividends.


Greg Smith, “WhyI Am Leaving Goldman Sachs,” The Wall Street Journal, March 14, 2012. 

Nelson Schwartz, “Public Exit From Goldman Raises Doubt Over a New Ethic,” The New York Times, March 15, 2012.
Susanne Craig and Landon Thomas, “Public Rebuke of Culture at Goldman Opens Debate,” The New York Times, March 15, 2012.