Saturday, November 22, 2003


This writer has just attended a large international conference of business leaders. So what were these businessmen like? Were they greedy, power-hungry control freaks and crooks, as they are often portrayed? No. "The focus of the conference was value creation. Specifically, the attendees discussed how to be not merely profitable, but how to add economic value to their companies for the benefit of shareholders, employees, suppliers, customers and society. As an observer, I can testify that the comments made by these powerful and successful people were in flat contradiction to the caricature.

The conference participants condemned practices such as short-term thinking for quick financial gain, misstating financial results, unethical behavior, using shareholder money to acquire businesses that added no value to the shareholder, and treating employees like commodities.

They spoke of the absolute necessity of strong ethics not merely as a means to an end but as a way of honoring everyone with whom their business deals. Topics such as transparency, honesty, hard work, and solid decision-making came up frequently.

Perhaps most surprising -- given recent controversies about executive salaries and bonuses -- this group called for executive compensation to be pegged not merely to profit and loss statements, which can be manipulated by a variety of means. Instead, they promoted the idea that as the total value of the company goes up or down, so should the compensation of the executive. To a person, they advocated the need to peg the salaries and bonuses of employees to the value added or value lost so that the employee has a stake in the corporation's future."


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