Video: The Future of Capitalism
Click on the image above to watch the April 12 ILLINOIS Leighton Lecture on Ethics and Leadership.
“Our job as leaders is to give employees a purpose beyond just doing a job,” said Keith Darcy, executive director of the Ethics and Compliance Officer Association (ECOA) and recent speaker at the annual ILLINOIS Leighton Lecture on Ethics and Leadership, held on April 2, 2012. The talk was entitled, "Managing Organizational Integrity in an Age of Texts, Tweets and WikiLeaks."
At first, Darcy’s point seems oddly to minimize the role of business leaders, but by the end of the talk his purpose becomes clear—to elevate leadership to a role whereby employees truly grasp and actively pursue the betterment of themselves, their employer and society.
To make his point, Darcy first spoke about extraordinary historic precedents and the rise of a sensitivity to culture and ethics.
Chronicling a “parade” of major foreign and domestic scandals of the past decade, Darcy took audience members on a walk through the historical context for the many decisions being made by regulators and legislators that ultimately impact company managers and the cultural environments that are shaping a generation.
Understandably, this veteran of the banking industry turned to economic insights. He spoke of the economic bubbles where enthusiasm and profits rise, peak, and ultimately burst in a recurring process he believes exposes “rot.”
Rot like the managers of Enron, the 7th largest U.S. company in 2001 who caused the second largest bankruptcy in U.S. history. Rot like the leadership at WorldCom who caused a subsequent bankruptcy in 2002 with a cost that eclipsed all other bankruptcies by a factor of three.
Darcy also spoke about the Tyco executive who used company money for his own personal gain, executives of Adelphia, the sixth largest cable operator, who took money from that company, and the dissolution of the Arthur Andersen accounting firm that cost 88,000 people their jobs.
In an impressive illustration of the gravity of regulatory settlements that came out of the related prosecution Darcy enumerated $1.7 billion paid by the Hospital Corporation of America, $1.64 billion paid by AIG, and billions more by several other organizations.
When Darcy spoke of the second economic bubble, “The Great Recession,” precipitated by the 9/11 attack, he made a case for what many believe was the near death of capitalism and the world economy. Quite literally, bad behavior by a relative few in leadership positions drove the world to the brink of economic collapse.
As truths about fraudulent bank loans, Ponzi schemes, and a laundry list of other billion dollar crimes meet with a growing effort to resolve and prevent future such crimes, Darcy points to culture as “the single biggest determinant of behavior in organizations and societies.”
Darcy noted culture as a significant contributor in every scandal and curiously as a frequently addressed component of settlement and reform efforts.
As Darcy moved past the historic scandals, the title of his talk, Managing Organizational Integrity in an Age of Texts, Tweets, and WikiLeaks, came into focus. He painted a bright future where culture around the world is changing to address a renewed interest in transparency and making public all sorts of illegal behavior. As business people and others seek to facilitate the disclosure of bad behavior, they are turning to internet and social media technology.
“The Twitter Revolution launched the Arab Spring…and we are living in an age of revolution, there is no question of that,” he explained. As governments are overthrown and influenced by collective efforts like the Occupy Movement, he said, “there are core issues here, and that is a contempt for the political people who are feeding themselves and for crony capitalism.”
Darcy drove home his message about the profound loss of trust in every part of society, in markets, organizations and leaders. To rebuild that trust, he believes, requires engaging shared values in the organizations and between the people in those organizations. He then asserted two key characteristics of a strong corporate culture that brought the audience to his major thesis.
• There must be a high level of agreement on what is valued
• There must be a high level of intensity about these values
By the end of his talk, Darcy had explained the loss of trust experienced all over the world would be remedied only through the efforts of inspired leadership. At every level, businesses and the people who manage them must take seriously the values and commitment of employees and in so doing, they will regain the trust necessary for prosperity.
View a frank discussion of ethics in business by Keith T. Darcy and Richard Leighton
View a student blog about another Keith T. Darcy speech
More about Keith Darcy:
For 40 years, Keith Darcy has been a leader in the financial services industry as well as a highly effective professional and active scholar of business ethics, corporate governance and organizational leadership. Darcy was a senior executive at Marine Midland Bank for 15 years, heading consumer banking and corporate finance. He also served as Executive Vice President of IBJ Whitehall Bank & Trust, CEO of the insurance company IGM and CEO of a related derivatives trading company.
Darcy has extensive experience serving on numerous ethics related boards. He is currently Chairman of the Board of the Better Business Bureau Foundation, on the board of Deepmile Networks and is a member of the Global Anti-Corruption Council of the World Economic Forum.
More about the Leighton Lecture on Ethics and Leadership:
The Leighton Lecture on Ethics and Leadership series was established with a generous gift from Richard '49 and Grace '50 Leighton. Richard believes opportunities for students to mingle with Keith Darcy and other leaders like him ultimately impacts their business behavior and contributes to improving the world of business. An accountancy graduate, Richard is the retired VP of finance at Barber-Colman Company in Rockford, IL.
The Lecture is co-sponsored by the Center for Professional Responsibility in Business and Society in the College of Business.