Every morning when Maria Gonzales takes up her post in the produce section of a major supermarket, she does so with a lot of pride. She's a working mother who is just glad to have a job. She likes what she does as well as working with her fellow associates. She's passionate about keeping her department looking fresh and inviting.
So who's putting the squeeze on Maria and, for that matter, corporate America? It used to be the customer. They would sniff, shove and discard anything that wasn't fresh in produce. It used to be the only thing that made Maria get angry.
Maria is now thinking of today's newspaper headlines, which shout that much more is going on to make our titans of commerce turn a blind eye to ethics; so they don't feel the squeeze. Nowadays, the pressures of the corporate boardroom, Wall Street, unions, government, employees, customers and, oh yes, that part of human nature -- greed -- have all conspired to make some gifted and talented chief executive officers lose sight of the prize.
Corporate scandals have everyone asking a lot of questions. How did Enron suck so much energy out of its promise? We asked Martha to say, "It wasn't so!" Was Tyco and its executive team really so inspired by the King Tut exhibit that they were willing to risk all to relive the experience?
Today, if you're keeping a corporate governance scorecard, our business world does not bode well.
Unfortunately, the food-retailing world has its own scandals. We experienced the Fleming-Kmart debacle over questionable accounting for allowances. Ahold is desperately trying to come back from its misstatements of profits to the tune of over $1 billion. See story on Page 12.
As the cry went out for better corporate governance and ethics, the regulators stepped in and passed the 2002 Sarbanes-Oxley Act to protect shareholders against corporate malfeasance.
The demand for accountability continues to be fierce. On May 20, Safeway's chairman, president and CEO, Steve Burd, and two other Safeway directors, face a no-confidence vote from six public pension funds. The institutional investors are critical of Burd's handling of the Southern California strike, the independence of Safeway's board members, and the company's performance. Safeway's stock dropped about 60% since early 2001. Burd defended the strike in an SN letter to the editor, stating, "Unless conventional operators act decisively, the neighborhood supermarket and the high-paying jobs it provides will become relics of history." Poor Maria.
Much like "Alice Through the Looking Glass," is it possible that practicing good corporate governance and making tough executive decisions may place today's corporate executive down the "topsy-turvy" rabbit hole of a world upside down? It's possible.
Corporate governance applies to customers, suppliers, investors and the communities in which we do business. It involves how ethically you deal with your constituents and win their trust. Studies indicate that companies that act ethically do better than those that cut corners for short-term gains.
In addition to a mission, a vision and a strong ethical policy, today's executive leaders may need some magic on their side to satisfy their constituents. Most of all, they need to inspire the Maria Gonzales' of the world to be the best they can for the company they believe in.