A Few Thoughts on Corruption
Like a Plague Spreading
We live in a time where things that were once considered “good” are called “evil” and where things that were once called “evil” are considered “good.” People’s views on things such as morality, decency, and civility have changed and I, for one, think it’s a shame. What’s right and what’s wrong is not as clear in the minds of our leaders or our citizens as it once was or as it should be.
Perhaps these thoughts are top-of-mind because of the ugliness of the 2016 Presidential election cycle we are in the midst of here in the United States. In any case, I am worried about the future of our country because of the tolerance for, and even acceptance and dismissal of, corruption that has and is taking place in our society. I’m not going to get into the particulars here. We’ve all got our own opinions about who is corrupt and how corrupt they might be and what it means. I’m not trying to start an argument or incite a riot. And I don’t want to get into a political scrape here.
The intention in this short post is to talk about corruption on a personal level and from there try to figure out how we, as individuals, can combat it. I hope to spur some self-examination in an effort to change our society for the good by first changing ourselves. What can we do as individuals to: a) make sure we are not slipping towards any form of corruption in our personal or public lives; b) limit the spread of corruption in our society; and c) expose it when we spot it?
First, however, I thought it might be useful to define corruption so that we are all on the same page. Mirriam-Webster’s dictionary defines corruption as: “dishonest or illegal behavior especially by powerful people (such as government officials or police officers).” I would add corporate officers and managers to that list. Another definition is: “a departure from the original or from what is pure or correct.”
With those concepts as a framework, let’s take a deeper look into corruption and how it affects us.
Avoiding Personal Corruption
We know what it looks like when we see it in others, but do any of us sometimes allow ourselves a step or two, knowingly or not, down the path towards corruption?
“No way, not me,” you may say in protest. Are you aware of what happened at Wells Fargo recently? In order to keep their jobs and prove themselves as valuable employees, many low and middle level banking professionals at Wells Fargo opened new accounts in the names of customers without the knowledge of those customers. In other words, they committed fraud and falsified documents and signatures in order to hit production goals. Why? Because their bosses expected it of them and they wanted to please the bosses and keep their jobs. This is an example of corruption starting at the top of an organization and flowing downward and outward because either no one recognized it as a form of dishonesty, or they rationalized it. It appears that most employees were too afraid to stand up for what is right. Keeping their job was more important than keeping their reputation. Which also begs the question of whether anyone saw it as inherently wrong at the time. If so, why didn’t they blow the whistle? Why did so many participate? It’s a question of personal integrity in a group setting.
Wells Fargo is not the only company to suffer from corruption. Recently, and through the years, there have been multiple examples of corporate/government/personal corruption in the news. Think of Bernie Madoff and his Ponzi scheme. Think of Enron and their manipulation of the energy market. Think of Lehman Brothers. Think of the Secret Service agents and the outrageous parties they charged to the unwitting taxpayer. How about the little city of Bell, California? These weren’t cases of isolated corruption by a small number of people. The corruption spread and infected many people within these organizations and wreaked havoc on the financial lives of customers, investors, and employees who placed their trust in these businesses and government agencies.
The corruption permeated the cultures of these organizations, but a few individuals were able to stand up and put an end to it, sometimes at great personal cost. Yes, doing the right thing hurts sometimes, at least in the short run. But being able to live with yourself and the choices you make is worth any and all inconvenience.
We, as individuals, have to know the difference between right and wrong and be willing to do the right thing even while everyone around us is making choices to the contrary. It’s called integrity. And it’s one of those things we used to cherish in our society. Now it’s being minimized or even mocked by those in powerful positions.
Calibrating the Moral Compass
Basically, the way I see things is that if you do something that is completely one-sided where you win and someone or everyone else loses, it’s wrong. Plain and simple. It’s wrong if you’re the only one benefitting. Once upon a time in America, we worked under the concept of “a rising tide floats all boats.” In other words, everyone can participate in success if we all get in and work hard and work together.
The list of multi-billion dollar companies that were founded on this concept is staggering. I won’t list them, but some of our most venerable corporations started with the idea that everyone involved – from the lowest level to the top – would be benefit by helping the company succeed. A good wage or salary, benefits, and perhaps, profit-sharing. Again, without pointing fingers, I’ve seen that “all-for-one and one-for-all” approach erode dramatically over the relatively short span of one generation. Instead spreading the spoils with all who helped win them or reinvesting profits, we have CEO’s making 200+ times what their average employees make. Why is that right? Who let that happen? What is so freaking special about them that the rest of us have to play servant while they get to play king?
Naively and perhaps, idealistically, I want to go back to the day when a CEO made enough money to live in the nice part of town, behind a security gate if that’s what he/she wanted to do, drive a handful of nice cars, and have that second home somewhere cool. I have no problem with them taking nice vacations, owning a boat or a plane, or belonging to the country club. If their company is doing well, they ought to be rewarded for their contribution. In today’s dollars, I’d call that a $2-3 million a year salary. Through in a bonus for incentive. Sure, why not.
But, they should only get this for helping their companies to be not only be successful today, but for that good fortune to continue into the next generation. Solid leadership with a vision for preparing to overcome tomorrow’s challenges today is valuable, but overlooked today. But that’s where the focus should be, not on the year-end or quarter-end numbers. Not on today’s valuation, but on tomorrow’s value. Shareholders should be compensated justly for the risks they take putting money into the company. Employees ought to share in the profits for doing their part to make and keep the company successful. Plain and simple. The way I like it and the way I think it ought to be. Period.
Many say, “The train has left the station.” “Those days are gone, never to return,” they tell me. “You’re old-fashioned, an idealist, a dreamer.” Yeah, maybe so. But I’m also right. We need a new train operator, new conductors, and, perhaps, a new set of rails. We’re America, damn it. We can make good things happen. Doing hard things, the impossible, even, is at the core of our national heritage. Being successful together is what made our nation great. We can do that again. And we should because it’s the right thing to do.
Don’t get me wrong. I believe in compensation commensurate with one’s value and contribution to the success of the company. More education, training, and experience should fetch a larger, more comfortable salary. Those at the top who make decisions that help the company stay competitive and rise to the challenge of the times should receive handsome rewards. Outrageous sums, though? No way. Hundreds of millions of dollars for having a good year or two? Not a chance. No one deserves that much unless they invented something extremely cool, valuable, or revolutionary. Think Steve Jobs, for one. Maybe Bill Gates, maybe. Very few others come to mind that really earned the right to make that much.
Let’s talk about incentive bonuses. I believe in them as a means to drawing out an employee’s best efforts over a sustained period of time. A bonus ought to be based on improvements in measurable areas. A bonus only needs to equal 10-50% of salary to be significant and meaningful to the recipient. Anything above that, especially when restricted to a small group, can be construed as ripping off the shareholders, customers, and the workers, both current and future. Put the excess profits into research and development, community outreach programs to raise the educational level of the next crop of workers, or upgrading existing systems to meet the demands of an ever-changing world. That is called vision and planning for the future and that is what so many CEOs lack today. Those profits can and should go a long way toward improving the company’s future, not lining the pockets of the C-level crowd just because they say they deserve it. Imagine how much better our economy would be without all those leaches sucking the life blood out of the companies we work for.
OK, what now?
Money talks, right? So, don’t spend it on companies that over-compensate their top level people. I know, I know. That takes research and research takes time and none of us has the time to determine who deserves our hard earned money and who doesn’t. But, we can each keep tabs on a few companies and what they’re doing, especially the ones where we spend the most.
Our vote is supposed to count. Hopefully, it still does, despite the recent nationwide discussion about voter fraud and hackable voting machines. Again, to vote responsibly, one must do one’s homework. Presidential candidates aren’t the only people we vote for. In fact, in the grand scheme of our Constitution, our Senators and Congressional Representatives play a larger and more important role in the shaping of the direction of our nation than the President. So, pick wisely. Same goes with local representation and initiatives.
Participate in online forums. Read the opinions of people who share your views, sure, but also those who have different and even opposing views. You’ll learn something new. Write to your Congress person and your state legislative representatives. Do it often. Do it well. Let them know what you think and how you feel about the issues facing your state and our nation. Be vocal even if you think they aren’t listening. Silence isn’t an option. That’s how the masses “go down quietly.”
My message is this: be aware of corruption. Start with yourself and make sure you haven’t allowed it to creep in to your personal or professional life. Next, keep a close eye out for the signs of infection around you. Don’t be afraid to “blow the whistle” when you spot something that isn’t right. Next, when you see signs of it in the government, get informed. Gather information from multiple sources to corroborate your opinions, then take action. Write to the op-ed column of your local paper. Comment on a blog post you like and maybe one you don’t agree with. Give your elected officials a piece of your mind by writing to them in clear, concise language that shows you’ve put more thought than emotion into it. In other words, don’t fire off your first draft rant. Use facts and share your opinions without sounding like a raving lunatic. Be careful about personal affronts and certainly don’t make threats. Just express your frustrations and your hopes in a way that will evoke action, not dismissal.
What do you think? Share with our audience some of your thoughts, worries, or solutions to this problem.
Meanwhile, here’s some additional reading on the subject of corruption and what we can do: