The coming generation of business leaders can be successful and ethical at the same time, but at some point may face tough choices to remain true to their standards, according to a former banker who is chairman of the New York Stock Exchange Group.
Over the past 20 years, said Marshall Carter, “a lot of trust has been squandered” as CEOs and their businesses pursued bigger profits, higher salaries and lifestyles that marked them as “corporate leaders.”
“Everyone seemed to want to get rich,” Carter told about 100 people who attended Tuesday's annual meeting of the Greater Omaha Business Ethics Alliance at Creighton University.
Carter, 70, is former chairman and CEO of State Street Bank and lives in Boston and New York City. The NYSE Group owns the New York Stock Exchange.
Corporate misconduct is spawning stricter government limits, he said, including this year's financial regulation law and rules being drafted by several federal agencies to police business conduct and protect consumers.
Carter said he frequently lectures at universities, and students say they wonder whether they can maintain ethical standards in a successful business career, especially in financial services.
He said he tells them, “Yes, but you may, at some point in your career, have to change companies if you're not happy with the ethical environment.”
The ethics of a business are tightly linked to its top officers and directors, he said.
“Corporate boards of directors were often accused of lackadaisical oversight, focused too much on compliance with specific rules and regulations and ignorance of conflicts of interest or risky businesses.”
Government also allowed unethical conduct, Carter said, such as actions by Fannie Mae and Freddie Mac, two government-sponsored home mortgage businesses that he said weren't properly supervised.
One problem is that there is so far no widely accepted measurement of good business ethics, he said, although some groups have proposed a “corporate social responsibility” scale. And there are few national role models of ethical business conduct to set good examples, he said.
Carter said business leaders can recognize and reject clearly illegal actions, but “it's the gray areas often occurring in day-to-day activities that require personal ethical compasses.”
Top executives must make their personal ethics clear to those who work for them, he said, urging company officers to get out among their employees and talk about ethical standards.
“You have to be very visible and vocal about it.”
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