Tag Archives: Jamie Dimon

Maybe It’s time for a new CEO – a Chief Ethics Officer

I think it is time for a new executive officer on every leadership team.  The name of this position should be CEO – Chief Ethics Officer.  (Though I doubt that these initials are available).

“First, do no harm…”

We’ve got a serious problem, and it is going to take some serious solutions.

Now, there is quite a range.  There are some folks who are just downright evil; lying, defrauding…  (Last night, on one of the local TV stations, a web discount site was exposed as that kind of company).

But most “evil” isn’t quite “evil,” but falls under the category of “mistakes.”  And even if they are acknowledged as “egregious mistakes,” they are still costly mistakes that hurt actual people, and can destroy a company’s reputation as a to-be-trusted, ethically upright company.

Let’s start with a verse from the Christian Scriptures:

“Do not be deceived.  Evil companions corrupt good morals.”  (1 Corinthians 15:33. Click here to read a lot of variations, from multiple different translations.  I especially thought this one was gripping:  Don’t let anyone deceive you. Associating with bad people will ruin decent people..”).

The principle behind this verse is important.  Good and decent people do not intend to do harm.  They do not intend to made bad decisions, to make mistakes, and they certainly do not intend to harm anyone.  But, bad judgment; ignorance; not “thinking through;” being “seduced” by compelling salesmanship or persuasion…  before you know it, a good and decent person can do a not-so-good and decent thing.

Now, how many examples do I need to offer?

Let’s assume that not every NFL player started out intending to do harm, but the allure and the persuasion of a coach and fellow players will lead someone to say, “okay, I will try to take this player out in this game.”  A bounty beckons a decent person to do a not-so-decent thing.

Let’ s assume that Jamie Dimon is the smartest, best banker of the bunch.  But under his watch, J. P. Morgan Chase made an “egregious mistake,” with $2 Billion lost, and real people hurt, from actual losses, and then stock value loss.

Days after disclosing a $2 billion trading loss at JPMorgan Chase, the bank’s chief executive, Jamie Dimon, admitted that “we made a terrible egregious mistake” in an interview Sunday on NBC’s “Meet the Press.”

Or, consider the plight of Mark Zuckerberg.  Farhad Manjoo has a terrific piece up this morning about the Facebook IPO — Ads, Ads, and More Ads:  How Going Public Will Change Facebook for the Worse.  Here’s the opening paragraph of Manjoo’s article:

When Facebook filed for its initial public offering in February, Mark Zuckerberg wrote a frank letter to potential investors in the firm. “Facebook was not originally created to be a company,” he began. “It was built to accomplish a social mission—to make the world more open and connected.” The founder went on to say that while making money was important to Facebook, raking in cash was not its primary goal. “Simply put: we don’t build services to make money; we make money to build better services.”

He also quotes a line from Google’s early days, adding his own warning:

His letter bears a resemblance to the note that Google founders Larry Page and Sergey Brin wrote to investors in 2004. In that note, Google warned Wall Street that though the search company’s shares were for sale, its mission was not. “Google is not a conventional company,” the pair warned. “We do not intend to become one.”
Don’t buy what any of these guys are selling. Eight years after its IPO, Google is still quirky, still sometimes surprising, and still wildly successful, but it is not at all unconventional. Just like any other company, Google has been swayed by pressure from investors to do things that once seemed unlikely…

In other words, going public and adding stockholders can lead to different decisions over the long haul – decisions that may betray the original mission of the company.

Now, I do not know how to fix this.  But I’ve got a few observations/recommendations.

1)  Run away from the evil folks…  The outright liars, defrauders, bad folks should not be trusted.  Don’t hire them; don’t do business with them; don’t ever trust them.

2)  Assume that every good and decent person can make an occasional mistake.  Sometimes, a whopper of a mistake (an “egregious mistake”).  So, even if you trust the person, remember Ronald Reagan’s advice:  “Trust, but verify.”

3)  Get serious about ethics.  Is it ethical to let the mission of the company be undone by some new set of stockholders?  Is it ethical to abandon a core mission?  Is it ethical to try some fancy new investment instrument when you can’t quite know the ultimate consequences?  Somebody, with genuine clout in the room, needs to be asking these questions.

4)  Quit bellyaching about too many regulations.  Regulations are created because we can’t trust some people, and we can’t guarantee a good outcome from the rest of the good and decent people.  The Volcker Rule, and other rules, are simply at times needed to save us from our own stupidity.  The regulations really can be for our own good.

5)  And, maybe it’s time to put a CEO in the decision making meetings.  A Chief Ethics Officer, who has only one job:  to ask, until he or she is almost hated for it, “is this the right, the wise, the ‘good’ thing to do?”  And, maybe, give that person the authority to overrule us in the midst of our own unwise stupidity.