Monday, January 25, 2021
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Articles
    • See All Articles
    • NEW: COVID-Related
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Leadership and Career
  • Vendor News
  • Jobs
  • Events
    • Webinars & Events
    • Submit an Event
  • Downloads
    • eBooks
    • Whitepapers
  • Podcasts
  • Videos
  • Subscribe
No Result
View All Result
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Articles
    • See All Articles
    • NEW: COVID-Related
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Leadership and Career
  • Vendor News
  • Jobs
  • Events
    • Webinars & Events
    • Submit an Event
  • Downloads
    • eBooks
    • Whitepapers
  • Podcasts
  • Videos
  • Subscribe
No Result
View All Result
Corporate Compliance Insights
Home Ethics

Business Leaders Must be Ready to Act When Moral Heroism is Needed

by Jim Nortz
July 16, 2015
in Ethics
Business Leaders Must be Ready to Act When Moral Heroism is Needed

David Myers was a successful and honorable business professional. A graduate of the University of Mississippi with bachelor’s degrees in accounting and business administration/marketing, he worked hard and had a very successful career. He was a Senior Audit Manager with Ernst & Young and later served as Chief Financial Officer and Treasurer of Lamar Life Insurance Group before retiring to spend more time with his wife and three young children.

But in 1995, shortly after retiring, Myers received a call from Scott Sullivan, a former Ernst & Young partner. Sullivan was the CFO of WorldCom, and with a bit of arm twisting, he persuaded Myers to join the management team as Vice President and Treasurer.

In 1997, Myers was promoted to Senior Vice President and Controller, managing a global staff of over 2,000. He was a key participant in the financing transactions, mergers and acquisitions that resulted in WorldCom growing into one of the largest telecom companies in the world.

However, the 17 acquisitions that built the company came at a high price—a very large debt burden. The constant cash demands of servicing the debt and continuing operations were exacerbated by a significant investment the firm had made in constructing Internet infrastructure that never produced the expected returns. The U.S. Department of Justice’s decision in June 2000 to block a proposed merger with Sprint was a significant setback for the company, threatening its financial health.

Shortly after the DOJ decision, Myers had a conversation that would change his life. Sullivan, his friend, said he needed Myers’ help. He explained that the company was facing significant adverse consequences unless special measures were taken to improve the numbers on WorldCom’s financial statements. Specifically, Sullivan wanted Myers to go along with a scheme to book over $800,000 of ordinary expenses as capital expenditures to inflate WorldCom’s reported income and thereby maintain the value of WorldCom shares.

Until this point in time, the worst legal infraction Myers had ever committed was driving above the speed limit. In fact, he prided himself on setting a good example and raising his kids to know the difference between right and wrong and to do their best to do right.

Despite his generally strong moral convictions, Myers went along with the scheme, convincing himself that it would “only be this one time,” and that they would “get it back” in the next quarter. Unfortunately, that’s not the way things turned out. For four more quarters, he and his colleagues continued to cook the books in a futile attempt to avert a day of reckoning that would surely come. Later, after they had concealed a billion dollars of red ink, the scandal was uncovered by an internal audit in 2002 and the house of cards collapsed.

On September 27, 2002, Myers pleaded guilty to securities fraud, conspiracy to commit securities fraud, and filing false statements. On August 10, 2005, he was sentenced to serve a year and a day in a federal correctional facility.

Myers’ transgression may have been unusually large, but the kind of decision he had to make in 2000 was not. For over a year now, in multiple ethics lectures in front of hundreds of people, I have asked members of the audience whether they have ever experienced pressure to compromise their ethical standards at work. In response, 80 to 100 percent reported that they had felt this pressure at least once in their careers. Sadly, this appears to be a nearly universal experience for business professionals.

These experiences all have two things in common: first, such pressure can come at any time in our careers, without warning; second, when we see or are invited to engage in wrongdoing in the workplace, we have three choices:

  1. We can play the villain and give in to the pressure, as David Myers did;
  2. We can be a passive bystander and neither participate in nor act to prevent the wrongdoing; or
  3. We can play the hero and courageously stand up for what is right.

To be an ethical leader, you must not only decide in advance to be a hero, but also prepare yourself to act the part. Given the stakes for you and for others, consider taking the time now to do the following three things to make sure you are ready:

  1. Identify your moral chalk lines, the bedrock principles that you will not compromise under any circumstances;
  2. Think about how you should react in situations that are likely to arise at work and may pressure you to cross your moral chalk lines;
  3. Be on the lookout for circumstances, both large and small, that may call for your heroism, and prepare yourself to take action when the need arises.

Perhaps no amount of mental preparation will be sufficient to prepare you fully. But imagine the difference being prepared might have made in David Myers’ life. Had he been ready, he could have refused to go along with the fraudulent scheme and could have tried to persuade Sullivan and others to pursue a more honorable course. Had he succeeded, WorldCom almost certainly would have had a significant financial crisis, but Myers and his colleagues would not have been party to what became, up to that time, the largest financial fraud in history. And they would not have been responsible for the catastrophic consequences that followed for everyone involved.

So don’t put off this work. Start today to prepare to act when your moral heroism is called for, and look for opportunities to take action every day.


Previous Post

Has the Panda Finally Come in From the Cold?

Next Post

4 Signs of a Weak Culture of Compliance and Ethics

Jim Nortz

Jim NortzJim Nortz is Founder & President of Axiom Compliance & Ethics Solutions LLC, a firm dedicated to driving ethical excellence by helping organizations implement effective compliance and ethics programs. Jim is a nationally recognized expert and thought leader in the field of business ethics and compliance with over a decade of experience serving multinational petrochemical, staffing, business process outsourcing, pharmaceutical and medical device corporations. Jim spent the first 17 years of his career as a criminal and civil litigator and Senior Corporate Counsel before becoming Crompton Corporation’s first Vice President, Business Ethics and Compliance in 2003. Since then, Jim has served as a compliance officer at Crompton and for five other multinational corporations, the most recent of which was as Chief Compliance Officer at Carestream Health. Jim has extensive experience in implementing world-class compliance and ethics programs sufficiently robust to withstand U.S. Department of Justice scrutiny. Jim is a frequent guest lecturer at the University of Rochester’s Simon School of Business, RIT’s Saunders School of Business, St. John Fisher College, Nazareth College and other law schools, universities and organizations around the country. Jim writes the monthly business ethics columns for the Association of Corporate Counsel Docket magazine and the Rochester Business Journal. Jim is a National Association of Corporate Directors Fellow, a member of the International Association of Independent Corporate Monitors and serves on the Board of Directors of the Rochester Chapter of Conscious Capitalism as the Board’s Secretary and Chair of the Governance and Nomination Committee. Previously, Jim served on the Board of Directors for the Ethics and Compliance Officers Association and the Board of the Rochester Area Business Ethics Foundation.

Related Posts

Trump supporters on the steps of the Capitol

Trump, the Coup, and Corporate Ethics

January 11, 2021
Book Review: Grappling With The Gray

Book Review: Grappling With The Gray

December 18, 2020
edison bulb

The 7 Principles of Ethical Leadership

December 14, 2020
model blue VW van upside down in a puddle

Critical Lessons from the Volkswagen Scandal

September 11, 2020
Next Post
4 Signs of a Weak Culture of Compliance and Ethics

4 Signs of a Weak Culture of Compliance and Ethics

Access realtime data
Dynamic Risk Assessments with Workiva

Special Coverage

Special COVID page graphic

Jump to a Topic:

anti-corruption anti-money laundering/AML Artificial Intelligence/A.I. automation banks board of directors board risk oversight bribery CCPA/California Consumer Privacy Act Cloud Compliance communications management Coronavirus/COVID-19 corporate culture crisis management cyber crime cyber risk data analytics data breach data governance decision-making diversity DOJ due diligence fcpa enforcement actions financial crime GDPR GRC HIPAA information security internal audit KYC/know your customer machine learning monitoring ransomware regtech reputation risk risk assessment Sanctions SEC social media risk technology third party risk management tone at the top training whistleblowing
No Result
View All Result

Privacy Policy

Follow Us

  • Facebook
  • Twitter
  • LinkedIn
  • RSS Feed

Category

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • Opinion
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Whitepapers

© 2019 Corporate Compliance Insights

No Result
View All Result
  • Home
  • About
  • Articles
  • Vendor News
  • Podcasts
  • Videos
  • Whitepapers
  • eBooks
  • Events
  • Jobs
  • Subscribe

© 2019 Corporate Compliance Insights