United plane on the tarmac at O’Hare

Lukewarm Apology Highlights Cultural Concerns

United Airlines made headlines last week for an incident involving the forcible removal of a paying passenger from one of its planes. In the 10 days or so since, United has been navigating a PR nightmare. The company’s CEO, Oscar Munoz, was quick to respond, but his apology rang hollow, and it may suggest a major disconnect in United’s culture.

This article was republished with permission from Michael Volkov’s blog, Corruption, Crime & Compliance.

We were all aghast at the spectacle on the United Airlines flight last week when a customer was dragged off a plane, refusing to give up his seat because of an overbooking. No one can underestimate the power of real-time video of controversial incidents.

United’s response as reflected in CEO Oscar Munoz’s three separate statements provides a textbook example of how not to handle a crisis and how not to apologize. His inability to offer a credible apology not only reflects a failure of leadership, but also raises some equally important questions as to the state of United’s corporate culture.

Munoz’s initial “apology” on April 10, immediately following the incident, reflected a questionable approach.

This is an upsetting event to all of us here at United. I apologize having to re-accommodate these customers. Our team is moving with a sense of urgency to work with authorities and conduct our own detailed review of what happened. We are also reaching out to this passenger to talk directly to him and further address and resolve this situation.

Munoz’s non-apology apology disturbingly referred to an apology “to re-accommodate these customers.” Munoz failed to address the most significant part of the incident: the violent removal of the passenger from the plane.

United also suggested initially that law enforcement alone failed to act reasonably when removing the passenger. Even if this were true, United was in a position to protect its passenger through the supervision of what was occurring and by speaking up to temper the law enforcement officers’ conduct. To suggest otherwise is a weak attempt to shirk responsibility.

Munoz eventually expressed contrition on behalf of United and repeated these apologies in subsequent television appearances.   Munoz also acknowledged eventually that his attempts to apologize fell short and did not convey his responsibility for the fear created by the incident.

Munoz and others at United ignored the most significant impact that incident had on its customers: fear. Airlines have power and authority over their passengers. This relationship has become more skewed in recent years as regulatory protections for passengers have declined. In the extreme, United’s conduct was the inevitable result of a corporate culture that has lost sight of the importance of its passengers. Of course, the legitimate protection of passengers from terrorism and other criminal conduct has to be preserved. However, this incident is qualitatively distinguishable from such an incident.

One wonders: had the incident not swept through social media as it did, would United have felt inclined to strengthen its message of apology and responsibility? The question lingers whether United’s response was a corrective measure to avoid public shaming, falling stock prices and an exodus of loyal clients or whether it was a response to ethical standards that guide its corporate culture. In this regard, Munoz’s lukewarm apology was revealing.

Munoz’s failure to offer a credible and sincere apology suggests a major disconnect in United’s culture. If a CEO cannot acknowledge such an egregious handling of an issue, you can rest assured that this same deficiency will permeate the entire corporate culture. Mid-level managers and employees may share the same perspective when carrying out their jobs.

A true apology requires giving up any possible excuses, giving up saving face and any attempt to “win” the public dialogue. A true apology requires a focus on what led to the incident and an immediate willingness to address its cause and consequences.

Tone at the top has a profound impact on corporate operations. When a CEO does not set an example for employees, the impact on corporate behavior and morale is significant. The CEO’s failure to act responsibly breaks the possibility of trust between company leaders and employees.

United’s violent removal of the passenger on the overbooked plane may reflect its culture of excuses and its inability to take responsibility for its treatment of its customers. Munoz’s inability to apologize reflected the lack of his own – and probably the company’s – ability to assume responsibility for its conduct.

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Michael Volkov

Michael Volkov

Michael-Volkov-leclairryanMichael Volkov is the CEO of The Volkov Law Group LLC, where he provides compliance, internal investigation and white collar defense services.  He can be reached at mvolkov@volkovlaw.com.  His practice focuses on white collar defense, corporate compliance, internal investigations, and regulatory enforcement matters. He is a former federal prosecutor with almost 30 years of experience in a variety of government positions and private practice.

Michael maintains a well-known blog: Corruption Crime & Compliance which is frequently cited by anti-corruption professionals and professionals in the compliance industry.Michael has extensive experience representing clients on matters involving the Foreign Corrupt Practices Act, the UK Bribery Act, money laundering, Office of Foreign Asset Control (OFAC), export controls, sanctions and International Traffic in Arms, False Claims Act, Congressional investigations, online gambling and regulatory enforcement issues.

Michael has assisted clients with design and implementation of compliance programs to reduce risk and respond to global and US enforcement programs.

Michael has built a strong reputation for his practical and comprehensive compliance strategies.Michael served for more than 17 years as a federal prosecutor in the U.S. Attorney’s Office in the District of Columbia; for 5 years as the Chief Crime and Terrorism Counsel for the Senate Judiciary Committee, and Chief Crime, Terrorism and Homeland Security Counsel for the Senate and House Judiciary Committees; and as a Trial Attorney in the Antitrust Division of the U.S. Department of Justice.

Michael also has extensive trial experience and has been lead attorney in more than 75 jury trials, including some lasting more than six months. His clients have included corporations, officers, directors and professionals in, internal investigations and criminal and civil trials. He has handled a number of high-profile criminal cases involving a wide‐range of issues, including the FCPA and compliance matters, environmental crimes, and antitrust cartel investigations in countries all around the world.

Representative Engagements

  • Successfully represented three officers of a multinational company in two separate criminal antitrust investigations involving a criminal antitrust investigation in the District of Columbia and the Southern District of New York.
  • Defended pharmaceutical company before the Food and Drug Administration and Senate Finance Committee relating to application for approval of generic drug.
  • Conducted internal investigation which exonerated company against allegations of false statements in submissions to the FDA and against improper conduct alleged by Senate Finance Committee.
  • Represented company before the US State Department on alleged violations of ITAR which lead to voluntary disclosure and imposition of no civil or criminal penalties.
  • Advised several multinational companies on compliance with anti‐corruption laws, and design and implementation of anti‐corruption and anti‐money laundering compliance programs.
  • Advised hospitals, pharmaceutical companies and medical device companies on compliance issues relating to Stark law and Anti‐Kickback law and regulations.
  • Conducted due diligence investigations for large multinational companies for anti‐corruption compliance of: potential third party agents, joint venture partners and acquisition targets in Europe, Africa, Asia and Latin America.
  • Represented individual in white collar fraud case in Alexandria, Virginia and secured dismissal of criminal charges and expungement of criminal record.
  • Represented company before Congress and Executive Branch in effort to modify Justice Department regulations concerning use of federal funds.
  • Advised and assisted World Bank in review of global corruption policies, enforcement programs and corruption investigations and prosecutions.

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