Editor’s Note: Bad Boys in the Board Room
Watcha gonna do when they come for you?
I am anxiously awaiting the next episode of COPS in which I’m sure we will see policemen chasing tastefully clad executives down Wall Street. Somehow, I don’t think they will be able to escape over a hedge or down a dark alley in their Armani suits and Italian shoes. Besides, the only ‘hedges’ and ‘dark alleys’ on Wall Street appear to be in the large accounting offices.
Having reached an ethical nadir in American business practice, there is great uncertainty as to what the future holds.
The phenomenal growth in the U.S. economy greatly depended on international confidence in the American business model, which the U.S. urged everyone else to adopt at the risk of losing out in the ‘new economy.’ Recently, this model has taken a severe beating with the revelation of corporate scandal after corporate scandal on an enormous scale not seen since the Asian economic crisis or the bursting of similar bubbles in Europe and Latin America.
Indeed, every business/economic model has its flaws and the true test is how quickly institutions can recover and remedy the problems. In this regard, the self-regulatory, finance-focused management regime enhancing the power of the CEO in the U.S. has prevailed since the 1980s and is now under revision. The true test of the model is not that it remains unchanged amidst turbulent conditions, but how quickly and flexibly it adjusts to the current marketplace, which demands further transparency in order to instill trust. However, timing is critical and the next few months will be very important in understanding how resilient U.S. institutions really are. In the meantime, the rest of the world is watching.
This issue of the GBR offers some insight and some hope in the midst of this maelstrom. First we will devote our Conversation feature to the memory of a truly inspiring person, George L. Graziadio, who passed away on June 6, at the age of 82. Mr. Graziadio, benefactor of the Graziadio School and co-founder of Imperial Bank, left an enormous legacy in the form of his business achievements, his community involvement, and his deep commitment to his wife and family.
It’s fitting that this issue addresses topics like ethics and leadership that were characteristic of George Graziadio. First, Steve Ferraro and Linnea McCord look at the role of ethics in corporate governance in their article, Who’s Driving American Firms? Directors facing new responsibilities. Then, Charles Kerns takes a timely look at the key characteristics of exceptional managerial leaders in his article, Managerial Leadership at Twelve O’Clock. Do you know what belongs in your Twelve O’Clock Box?
Another very timely is topic is how best to manage investments in a sagging market burdened by corporate scandal and investor anxiety. John Paglia looks at how investors can allocation their assets to manage risk and maximize returns for a given time horizon.
Then, Charles Hunt looks at mediation and arbitration as effective alternatives to the courtroom, and Jack Green offers his experience running business simulations to those who wish to use such tools in their organizations. Finally, Larry Bumgardner brings us up to date with recent Supreme Court rulings that particularly impact business, while The LOOP looks for gum underneath the nation’s highest bench. Which leads me to our Supreme Court Quiz where you can test your knowledge of the high court without fear of a contempt citation.
And don’t give up on the U.S. economy. The sky’s not falling. We’re just experiencing a little financial and moral correction.
About the Author(s)
Charla Griffy-Brown, PhD, is an associate professor of information systems at the Graziadio School of Business and Management. In 2004, Dr. Griffy-Brown received a research award from the International Association for the Management of Technology and was recognized as one of the most active and prolific researchers in the fields of technology management and innovation. A former researcher at the Foundation for Advanced Studies on International Development in Tokyo, she has also served as an associate professor at the Tokyo Institute of Technology. Dr. Griffy-Brown graduated from Harvard University, is a former Fulbright Scholar, and holds a PhD in technology management from Griffith University in Queensland, Australia. She has worked for NASA at the Kennedy Space Center and has taught innovation/technology management courses in Australia, Singapore, Indonesia, Malaysia, and Japan. She has also served as a consultant for the United Nation's Global Environmental Facility and the European Commission.