An Entire Armada of Crooked Captains

Manager’s Samizdat

Al Lewis has produced a delightfully wicked roll-call of crooked corporate captains, following from the hapless case of Capitano Francesco Schettino, the Italian who actually managed to “roll” the $450 million cruise shop Costa Concordia.  (I thought that only happened to SUVs on icy Vermont roads, not ocean liners!  Bravissimo, Capitano!)

In case its life at WSJ.COM is too brief – I mean, I thought Rupert Murdoch was buddies with these guys – the article is reproduced below in its entirety, properly attributed, for posterity.  I hope none of them had MBAs.  What?  Most of them?  Hilarious!

O Captain! My Captain!

AL’S EMPORIUM, JANUARY 22, 2012, By AL LEWIS

Columnist's name

The world’s been too hard on Capt. Francesco Schettino, calling him “Captain Coward” and “Chicken of the Sea” when he has performed as well as many others at the helm.

Yes, he ran aground a $450 million cruise liner, lost lives, abandoned ship and turned Carnival Cruise Lines into a circus. It was an accident.

Plenty of other captains have boldly steered into perilous waters, failed to see rocks and crashed. They’ve also lost footing on shifting surfaces, only to land in lifeboats, leaving others to drown. This has been a regular headline for decades.

Capt. Jeffrey Skilling abandoned ship to spend more time with his family, months before Enron hit bottom. He said it was an accident, too.

Capt. Bernie Ebbers said he didn’t have any idea how phony accounting entries got into his ship’s log. As captain of WorldCom, he couldn’t be bothered with minor details like accounting.

Capt. Dennis Kozlowski liked Italian islands as much as Capt. Schettino. He threw a $2 million birthday party for his wife on Sardinia, using money he looted from his shareholders at Tyco International.

Capt. Richard Fuld steered Lehman Brothers into a swampy lagoon of subprime debt. He, too, hit an uncharted rock. Or, at least, it wasn’t on his chart.

Capt. Jimmy Cayne was reportedly smoking weed and playing cards as Bear Stearns sank.

Capt. John Thain took care of his crew at Merrill Lynch, pushing through $3.62 billion in executive bonuses as his firm washed up on the Bank of America.

Capt. Angelo Mozilo wouldn’t go down with his ship. He unloaded more than $200 million in stock options before Countrywide Financial capsized, and he left the wreckage to shareholders.

Capt. Bernie Madoff sure had a funny way of financing his yachts. He even named one of them “Bull.” People somehow thought this was a reference to bull…markets.

Capt. Allen Stanford, the world’s second-greatest alleged Ponzi schemer behind Mr. Madoff, is slated for trial this week. He took over the island nation of Antigua with his offshore banking empire, Stanford Financial. Some even call him the “Pirate of the Caribbean.”

Capt. Tony Hayward went to a yacht race as BP’s rig was spewing oil into the Gulf of Mexico. He expressed the same thought other disgraced captains must have: “I want my life back.”

Capt. Daniel Mudd of Fannie Mae and Capt. Richard Syron of Freddie Mac overloaded their cargo hulls with junk mortgage securities. They didn’t need to hit a rock. They sank themselves.

Capt. Jon Corzine sank MF Global so deep they can’t seem to find all of his ship. Not even the Bermuda Triangle can make $1.2 billion in customer funds mysteriously vanish.

Capt. Ben Bernanke has launched QE1 and QE2 and he may soon christen QE3 in the Federal Reserve’s fleet. He wants these bond-buying programs to bail out every foundering captain on the sea.

Unlike many other captains, Capt. Schettino wasn’t risking it all in a self-dealing bid to get stinking rich. He probably wasn’t drunk like the captain of the Exxon Valdez. He was just trying to show people a good time by skimming by a beautiful island.

He then did what every other captain does in an unimaginable crisis. He learned he wasn’t as fearless as he’d pretended to be. He panicked. He slipped. He somehow landed in a lifeboat. He probably wishes he hadn’t. But it’s not like he jumped with a golden parachute.

Al Lewis is a columnist for Dow Jones Newswires in Denver. He blogs at tellittoal.com; his email address is al.lewis@dowjones.com

“Occupy the Business Schools?”

Occupy the business schools?  Really?  Because this is what David Ikenberry and Donna Socknell declared last week in Bloomberg/Business Week.  Does this mean doing away with the hierarchies – the academic ranks, the departments, tenure – and replacing them with the horizontal organization of Occupy?  Does this mean opening up decisions to all stakeholders’ voices, with transparency, joy, and love?  Occupy is a militant protest movement to its most ardent participants, not a marketing slogan, corporate change program, or lifestyle brand.  Occupy means radical reexamination of every institution with a hand in the overconcentration of wealth and power, the plutocratization of politics, the marginalization of communities and cultures, and the plunder of the Earth.

Invoking “Occupy” is a radical step for any B-school dean.  What further steps await the intrepid dean-gone-occupier?  Slashing tuition from above $60,000 to more reasonable levels?  Forswearing the facilitation of private student loans?  Surely, including ethics lessons in every course – as if every moment weren’t teachable – falls far short of a moral education.  Who cares about deontological this and consequentialist that and how-would-you-resolve-this-dilemma if the MBA students are not surrounded by a caring, collaborative, supportive and authentic community throughout their studies, where ethical leadership is modeled continually, and where domination and hypocrisy are leavened and reversed?  It takes a deeply moral community to build a courageously ethical leader.

What about the numbing reductionism of the modern MBA paradigm?  Occupy seeks to make whole a broken society and political economy.  In conventional MBA programs, the departments are proudly disparate siloes, decoupling academics from one another’s worlds.   They read different journals, go to different conferences, write mutually unintelligible (yet similarly irrelevant) papers, and teach different theories and world-views.  What good is an overlay of ethics modules if the “functional” disciplines are deeply fractured and reductionism rules?

In 1960, about 5,000 new MBA students enrolled in American business schools.  In 2009 – the all-time peak – this number reached around 125,000.  The half-century spanned by these two years saw our middle class decline, our manufacturing flee, our family farms decimated, our small towns gutted, our people ravaged by excess and pointlessness, and the financial sector swell into a dominant component of our economy.  It also saw the explosive spread of a global capitalism that grows more extractive and heedless by the day, particularly in places where environmental protection and human rights are weak.  Is there any connection between the mindset of the modern MBA grad and these destructive decades?  One has to wonder, because they were running the organizations that made all this happen.  Ikenberry and Socknell call them “good people doing terrible things.”  How were they good?  Good is what good does [that’s what business ethics profs call “consequentialism,” by the way].  Society lets the likes of Enron, Bernie Madoff, Jack Abramoff, and MF Global do what they do because of a corrupted, hard-hearted, individualistic culture of economic power cutting across business, government, education, and other major institutions.  Yeah, maybe occupying the B-schools would help.

Finally, are cross-curricular CSR modules even remotely adequate?  Modern management has taught us to think of people as consumers, to ignore communities, to buy off “stakeholders,” to abandon economic losers, to discount the future, to place exaggerated value on personal wealth, and to treat much of what makes our planet and our humanity wonderful as disposable commodities.  CSR doesn’t really challenge these.  CSR is often about band-aids and public communication that, at best, mean a little less unsustainability.  This is the most that even the “good” companies usually want in their new hires – not real occupiers!

John Ehrenfeld sees sustainability as “the possibility that humans and other life will flourish on Earth forever.”  Can business schools steeped in the converse be trusted to truly “occupy” themselves in this spirit?