| Please Note: The editorial on this page spurred several interesting ethics discussions among the BGS staff, and as such, we thought we would turn the discussion over to the Society’s lifetime members. Whether you agree or disagree with its content, it is our hope that this article will spur some additional thought and dialogue about the role of ethics in business. What are your thoughts about this commentary? Send your opinions to exchange@betagammasigma.org |
Here’s the latest from the “Letters We’d
Like to See Written” department:
To: Mr. Kenneth R. Feinberg
United States Department of the Treasury
Washington, DC
Dear Mr. Feinberg:
You don’t know my name, but you’ll recognize
my position. I’m one of those executives at AIG
who, amid immense public outrage, received a bonus last
March. At the suggestion of our chairman, Edward M. Liddy,
I returned my payment to the company, as did most of my
colleagues. Of my own free will? Yes. But also, I suspect,
because I was receiving death threats.
That probably hasn’t happened to you in your current
role as President Obama’s “compensation czar.”
They never talked about this situation in my MBA program.
It’s made me ask the tough moral questions: Why
am I in this career? What does it all mean? Who am I?
A couple of years ago, I could answer that last question
proudly: I’m an exec at AIG, the major global insurance
company. I’m providing a needed service to customers.
I’m part of an enormous flowering of global capitalism.
And (let’s not kid ourselves) I’m getting
a handsome paycheck.
Then came the public uproar after it was discovered that
people in my division, Financial Products, were collecting
massive bonuses for wrecking the company. You know the
history. You know how we invented and sold mortgage-backed
derivatives. You know how their value evaporated, how
AIG had to accept a $180-billion bailout from taxpayers,
and how, when it looked like taxpayer funds were paying
our bonuses, the public went bananas.
Next March, as you also know, about $200 million in scheduled
bonus payments will be due to our Financial Products team.
That’s going to raise a tough choice for you. The
lawyers agree these contracts are valid and the bonuses
are legal. But Congress wants to tax them at 90 percent.
You’ve got a dilemma: You don’t want to break
the law by disallowing these bonuses, but you don’t
want to be party to morally suspect legislation that uses
the tax code to attack specific individuals.
So here’s my proposal — a kind of trilemma
option, if you will. When I’m paid my next bonus,
I won’t return it to AIG. I’ll accept it and
then distribute it — all of it — to municipalities
and nonprofits in need of funds. No law will make me do
it. Instead, I’ll do it because it’s the right
thing to do. Given AIG’s reputation, you may not
trust me, so let me explain my reasoning.
For starters, we should have seen this collapse coming — all of us, including the leadership at AIG, Wall
Street, Treasury, and Congress. But none of us did. Sure,
we sensed a downturn, but we all thought it would be another
straightforward economic recession. So we addressed it
in the language of numbers — assessing risk, determining
probabilities, and measuring markets.
There was only one problem: This wasn’t an economic
recession, but an ethics recession. What collapsed wasn’t
math but integrity. Over at AIG, as we bundled mortgages,
we trusted the banks. We took it on faith that, in millions
of conversations between loan officers and potential customers,
the information was essentially honest — no lying
by customers about income, no cover-ups by bankers about
fine print. We thought these mortgages had been well vetted.
We didn’t know they were improvised explosive devices
with time-delay fuses.
I’m not saying we were innocent. We looked the other
way, especially when we had doubts. We pushed our products
hard, even though they were too complex to explain to
our bosses. We thought we were doing what the culture
wanted us to do: make money by taking risks.
And we got it wrong. But that’s also part of capitalism:
When you fail, you lose money. So I’m prepared to
give up the bonus money — but not to give it back.
The reason? I want AIG to succeed. I don’t mean
to sound arrogant, but as the company winds down its exposure
on these new products, it needs my AIG-specific knowledge
and experience, so it needs to continue compensating me
well. But the real key to AIG’s success doesn’t
lie in the numbers. It lies in turning around its shockingly
unethical public image. Unless that changes, none of us,
no matter how well paid, can save AIG.
How to start that turnaround? Why not right where we live?
I have in mind not my own home town (we’re plenty
upscale) but a much grittier place three towns away, where
education, police, and charities serving the elderly have
taken enormous hits. That’s where I’ll make
my contributions.
Will my name be attached to the gifts? Yes, but only in
connection with AIG. The IRS will see the money coming
from me, but the public will see it coming from an AIG
executive.
Will my colleagues join me? I hope so: The $200 million
in AIG bonuses being projected for next March could make
a real dent in some of America’s poorer communities.
But wouldn’t it be simpler just to give my bonus
back to AIG? Sure. But that would only help heal the economic
recession. We need to heal the ethics recession. We need
the country to realize that real individuals, not just
faceless corporations or government agencies, are responding
to real needs with real philanthropy.
And face it: I need to heal my doubts about my own integrity — the gnawing fear that I really don’t have
much of a moral compass left, that ethics has somehow
passed me by. Because that’s something else they
never talked about in my MBA program: the crucial role
of ethics in capitalism, and the need for all of us to
give back.
I know I’m awfully late in asking, but can you let
me play an active role in making the world a better place?
Copyright 2009 © Institute
for Global Ethics
As previously published as part of Ethics Newsline®,
the Institute’s online weekly newsletter that gathers
the week’s ethics stories from around the world
http://www.globalethics.org/newsline/
