This commentary originally appeared in Chief Executive.
Randall Stephenson, CEO of AT&T, and Novartis CEO, Vasant Narasimhan were both wise to respond swiftly, personally, and directly for their company’s ties to President Trump’s business associate Michael Cohen.
Both CEOs admitted their miscues in channeling dubious “consulting” fees to President Trump’s business associate Michael Cohen in an apparent influence-peddling effort. They both came out (first Novartis, then AT&T) after the news of these payment became public with statements condemning their involvement in this practice of “pay to play.”
While each seemed to identify others in their organization who may have made the decision and approved the payments, they used their own voice as CEO to classify these moves as mistakes. Too often, bosses like to be like the captain of the ship when there is good news, like announcing shore leave to their sailors. When it’s time to cancel shore leave though, they leave that to the first mate.
This was the misguided reflex of CEOs of Toyota, BP, Equifax, United Airlines, Yum! Brands, Coca-Cola, and Carnival Cruise Line after missteps in recent years. These other CEOs, much like Facebook’s top leaders, delayed responding to missteps.
By contrast, the CEOs of AT&T and Novartis more resemble the models of accountability shown by the leaders of Starbucks and Nordstrom, who apologized personally and quickly for the recent headline-grabbing misconduct of their employees.
There is a larger problem where every new administration has shown willingness for the White House to be for sale. Andrew Jackson’s administration was first described as the “spoils system” where Senator William Marcy said, “To the victor belong the spoils of the enemy.”
Warren Harding sold seats at his poker parties for $1 million and the infamous Teapot Dome scandal ensnarled his major donors. Richard Nixon infamously sold ambassadorships brokered by his aide H.R. Haldeman. Jimmy Carter sold seats at historic state dinners, and his brother Billy was a paid lobbyist for Middle Eastern powers.
George H. W. Bush sold memberships in the “Bush Team 100” club. Bill Clinton sold overnight stays in the Lincoln Bedroom or White House dinners for $100,000. George W. Bush similarly sold overnight stays at the White House or Camp David for the same price as Clinton.
The Trump White House has confused allies and enemies alike. Business leaders have found themselves exploited by divide and conquer tactics, so they looked for inside tips. The apparent Environmental Protection Agency corruption and Mar-a-Lago encounters look like the swamp is sadly resurgent.
We can do better. If U.S. Presidents and their pals cannot shake this greed addiction, corporate executives can still “just say no.” Of course, we must live at home by the standards we espouse for conduct abroad in the U.S. Foreign Corrupt Practices Act.