Frank Navran, a friend, colleague and perceptive ethicist with a talent for teaching ethics with vivid stories, tells this one, a true case of integrity applied the right way, by the critical person, in a timely fashion:
While attending an ethics conference in New York in October of 2008, I decided to stay with friends in New Jersey. That meant riding the train into the City for my conference. On the second day of the conference, I happened to sit next to a young woman who was neither reading nor napping so I engage her in conversation. It started with a simple “Do you ride the train every day?”
She said that yes. she does ride the train every day, and had been doing so for seven years since she and her family chose to move to New Jersey “for the kids”. I asked what kind of work she did, and she replied that she was the CFO of a mid-sized insurance company. Now, recalling that this was the fall of 2008, insurance companies were in the news. And so I asked her how things were at her company. Her reply was, “Better than most”.
Now I was curious. “What does “Better than most” mean?”, I asked.
She went on to explain. “About three years ago I left AIG, where I knew my prospects for advancement were limited, and accepted an offer to become the CFO for my current company. As a newly-hired CFO, one of the first things I did was to meet with my staff. When meeting with the gentleman who managed our investment portfolio I asked for a description of our holdings. He proceeded to sing the praises of our investment strategy which included a significant percentage dedicated to what he referred to as “securitized debt”.
She said she was not familiar with these instruments and asked how they worked. His reply was that they were AAA rated and were returning huge investments. Unsatisfied, she probed for details, and when he was unable to provide them, suggested that the “do his homework” and meet with her again in two days.
Two days later, when asked to explain securitized debt, he restated that they were AAA rated and very profitable but added that no one seemed to really understand just how they worked.
Her reply, she told me, was simple She gave him three months to divest the company of anything that he couldn’t adequately explain to her simply because she was not going to go before her Board and justify their investment strategy without understanding the nature of and workings of the instruments in which they were invested.
“In other words, she had integrity,” Frank concludes. “What a radical concept.”
Indeed. What the CFO did was not, of course, radical. It was honest, responsible and prudent. We can only imagine how different things would be today if there had been more executives like her when the financial sector was operating with mirrors, winks, and sleight of hand.
<Sigh!>
Ethics Alarms 