Wednesday, 4 July 2012

Avoiding Responsibility - The CEO's Creed.

In large companies, those in charge ask two questions; can we make it cheaper? Can we make it generate more profit?

These are the questions being worked to, never asked out loud, but always behind every decision being made.

All the bonuses that big companies pay their executives are paid for performance. Performance is judged on money. Full stop. Some performance criteria will sound like they're about finishing a project on time, but that's only code. The result of hitting that completion date will be a financial gain to the company - so even performance criteria leads back to money.

Greed is really the one thing the human race cannot conquer. And bonuses for performance is all about greed and greed makes people cut corners and break laws. With this system in place, it is inevitable that once a company becomes big enough the 'brain' of the corporation is so removed from the resulting decisions made and the impact of those decisions on individuals that there's no guilt involved.

Maybe the parent company hires another company to oversee production of item X. And that contract goes to the lowest bidder or their own subsidiary. 20 years on, after billions have been made, the news of the illegal, dangerous or immoral practises come to light and the parent company turns around, hands in the air and says we didn't know. That company over there did all the bad things - not us.

A six year old is not allowed to get away with this as an argument against doing the wrong thing, but time and time again we let the most powerful in our communities do exactly this.

The worst thing about corporate life are the endless post mortem meetings to try and uncover why something has gone wrong. When the reason something in a large corporation goes wrong is almost always blindingly obvious why. The company, in a system set up to push and promote managers down the line to cut corners and push limits, turned a blind eye as the profits rose, never asking how, until finally the illegal, immoral or dangerous practises are uncovered by the public.

Recently we've had Rupert and James Murdoch arguing they knew nothing of the phone tapping that went on in the UK newspaper business. Now we have Barclays bank who have clearly got greedy and broken laws and once again the executives all claim it was a misinterpretation of memos that caused the problem and no-one on the top floor had any idea of what was being done in the rank and file.

There's a great quote from a security guard at a store who once said - "I cannot tell you how many customers have told me they weren't thinking and simply forgot to pay for something, but I've never met anyone who was so confused they paid for something twice."

And so it goes in the corporate world. When was the last time a commission found a company broke the law in a way that made them less profit?

Rupert and James didn't fall on their swords because they owned the company. But the Barclay boys of Del Missier and Diamond seemed to do the right thing and accept what they deserved - instant dismissal.

 - and then I read this...

"Chief Operating Officer Jerry del Missier quit hours after CEO Bob Diamond's resignation. Chairman Marcus Agius resigned on Monday, but in the wake of Diamond's resignation, Agius returned as chief executive on Tuesday."

Seriously? The guy at the very top is giving himself the CEO's job 1 day after resigning in disgrace.

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