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CEOs: Can Ethics be Obliterated?

How have U.S. accounting scandals shaped the image of CEOs and their role in the U.S. economy?

July 9, 2002

How have U.S. accounting scandals shaped the image of CEOs and their role in the U.S. economy?

U.S. CEOs have had a rough time recently. Enron, Arthur Anderson and now WorldCom have made them look corrupt and greedy. This stands in stark contrast to their heydays back during the bull-run days when CEOs were revered almost as much as cover girls in fashion magazines. Our new Read My Lips explores what people think of CEOs now — and what they themselves have to say about their role in today's world.

Has the image of the CEO suffered in recent months in the United States?

“The days of the star CEO are over.”

(Odey Asset management analyst, July 2002)

What among other things has tarnished their reputation?

“Our titans of industry turned out to be the greediest bunch of no-talent morons the world has seen since the Harding Administration.”

(Michael Kelly, Washington Post columnist, July 2002)

Are CEOs still the masters of globalization?

“Globalization is a process that forces every company, and every CEO, to confront the truth.”

(Dr. Ron Sommer, chairman of the board of management of Deutsche Telekom AG, March 2002)

What does the "CE" seem to stand for in CEO?

“Capital eliminator.”

(Leonard Knoll, shareholder of DaimlerChrysler, April 2002)

How bad is the situation in the United States really?

“Not a day goes by, it seems, without yet another chief executive of an American company handcuffed and carted away under the glare of television spotlights.”

(Sandra Ward, Barron’s author, June 2002)

Are CEOs ready to accept their responsibility?

“I didn’t do anything wrong.”

(Jeffrey Skilling, former Enron chief executive, December 2001)

Can some CEOs blame it all on the global economy?

“Globalization is no immunization against mismanagement.”

(Henry Paulson, Chairman and CEO of Goldman Sachs, January 2002)

Why was it possible for many CEOs to accumulate so much money despite their companies' bad performance?

“The pay of CEOs is being set by 10 friends of management, which includes one token woman — and one token minority. The other six are CEOs themselves.”

(Graef Crystal, leading executive compensation consultant, June 2002)

Are there any honest CEOs left?

“We are not a stock you can sleep well with at night.”

(Amazon CEO Jeff Bezos, March 2001)

Do U.S. politicians still seek the CEO's advice?

“If you want to talk to negative people, talk to CEOs.”

(U.S. Treasury Secretary Paul O’Neill, February 2002)

How secure are the jobs of CEOs?

“It used to be, you were a CEO for a decade or more. The market’s just impatient. It’s not allowing executives as much time as they used to have.”

(Wall Street analyst, June 2000)

Did that make some CEOs less prepared to take risks?

“In Internet time, three months is a year. Make a bad decision or two — and you are in trouble. That makes me nervous.”

(Thomas Middelhoff, Bertelsmann CEO, June 2000)

Are the days of the visionary CEO over?

“You shouldn’t have a long-term strategy anymore, because you won’t be able to move fast enough.”

(Orit Gadish, chairman of Bain & Co., February 2001)

How are CEOs rated?

“It is obvious, if you commit yourself and don't deliver, what the result is.”

(Jürgen Schrempp, CEO of DaimlerChrysler, on his promise to turn around his company, February 2001)

And what about CEOS as an economic indicator?

“It’s not consumer confidence we’re worried about. It’s CEO confidence.”

(Abby Cohen, chair of Goldman Sachs’s Investment Policy Committee, on the U.S. downturn, September 2001)