Little Red Blog

For many reasons I had not intended to discuss in this space the firing/resignation of Harry Stonecipher, the man brought in to rebuild Boeing’s luster just over a year ago. And then I read what was to be one too many attempts to connect his firing to the conservative or religious right. Steven Pearlstein, of the Washington Post, penned a column entitled - Ethics Pedestal Assures Some Hard Falls. And his title is correct, even an understatement. His thesis is, however, broken. Why, because like much of the legacy media, Mr. Pearlstein apparently couldn’t author this column without an unhealthy dose of politics. Politics that not only made his conclusion wrong, it also showed the thinness of his journalistic objectivity.

Pearlstein begins with a rather funny quip taken from the Wall Street Journal.

A question that will be played out in ethics classes at business schools for years to come is whether Boeing, one of the largest government contractors, struggling to get out from under an ethics cloud, should have fired its married 68-year-old chief executive for carrying on with one of the company's Washington area employees.

Perhaps the best line of the week goes to the Wall Street Journal's editorial page, which noted wryly that if something like this had happened at rival Airbus, the French would have put the fellow up for a bonus.

Pearlstein then explains the two "truths" that the "profound" retort exposes.

First, given the political and legal environment in which the company finds itself, and the prevailing business culture in the United States, the board probably made the "right" decision in demanding Harry Stonecipher's resignation.

When I first read this paragraph, Pearlstein’s decision to place quotation marks around the word right caused a brief pause. Is Pearlstein implying that it was "right" as in the political right or "right" meaning the proper decision, one he would agree with at least. The second truth Mr. Pearlstein recognized cleared things up a bit.

And, second, it's a ridiculous outcome that leaves nobody better off and raises serious questions about that environment and that business culture.

Indeed it does. Pearlstein’s "right" was not agreement or appropriateness. He is implying that it was the political "right." Of course, business executive has affair, gets fired by his employer for affair or through bizarre and convoluted logic gets fired to avoid embarrassing the company, it must be the moral majority reborn as the board of directors.

Ridiculous.

It wasn’t a moral decision to fire Stonecipher, nor was it done to appease the morally inclined government officials who might be offended if, or when, the story got out. The board was acting out of fear, self-loathing, and risk aversion supported by an army of litigious and morally bankrupt attorney’s (or at least morally blinded by their profession) who have all but squashed individual freedom for those employed, particularly high profile employees, by America’s once great businesses.

The problem is that Pearlstein knew this. His comments regarding zero-tolerance and the absence of making a decision on a case-by-case basis prove it. He just couldn’t connect the proverbial dots. Personal responsibility has been abdicated. In the boardroom or the management offices the standard is aligned toward the lawyers advice about potential lawsuits much more so than it is to the ideals of personal accountability or leadership.

Pearlstein continues:

What's most dangerous, however, is the implicit acknowledgment by the board that it is too risky for a company doing business with the government to be run by someone whose personal life might offend the ayatollahs of the religious right.

The "ayatollahs of the religious right" he says. Aside from the clear attempt to paint the Bush administration as similar to the Mullahs in Iran (which is shameful but not my point), this is simply wrong. As is his closing.

You would have thought we might have learned a lesson from the disastrous campaign to impeach a president on morals charges, only to ensnare a speaker-designate of the House. Instead, this same puritan standard now seems to have been extended to the corporate sector.

One of the mistakes of the '90s is that we all put too much stock in the magic power of chief executives. Along with giving them too much authority, attention and money, we also held them to unrealistically high expectations. Harry Stonecipher now joins the list of those who both benefited from that misplaced importance, and were brought down by it.

And there it is. We didn’t learn a lesson after failing to impeach a President, who should have been convicted of perjury, and now we’ve infected the business world with our mean spirited moral and ethical standards. WRONG.

What was learned from the failed impeachment is that personal accountability can be abdicated and nothing will be done about it. The executives Pearlstein describes as having magic power have much less than he attributes to them. The lefts greatest assets, attorneys and judges, have effectively neutered much of the executive sphere, leaving them impotent and incapable of making decisions or holding each other accountable (save of course on matters of P&L). Stonecipher may have acted in a manner inconsistent with the Board's expectation. And accordingly, they have every right to request his resignation. But to pass it off as if it were a moralistic intrusion of the religious right into the boardroom of Boeing is flatly wrong. Had the board been acting morally, they would have determined that Mr. Stonecipher’s relationship was none of their concern, save the use of corporate email, and simply demanded an end to the use of corporate assets for such communication. Unfortunately, it wasn’t a moral issue; it was an issue of risk mitigation and avoidance. And rather than telling them that, Mr. Pearlstein lets his politics guide his response.