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Question: (E-061)
published in Jim Bracher's Integrity Matters newspaper column on August 13, 2003

"Former Enron execs aren't free yet"

Dear Jim:

What next? The Dallas Morning News announces that "Two Top Enron Executives Escape Indictment". Where is justice? What happened to integrity? Who can we trust? Can we still have confidence in business and government? Jeffrey Skilling continues to spend time with his family and Ken Lay is now working at a business start-up. These are the two men who oversaw the highflying Enron Corporation and they are denying accountability for the billions squandered. Neither of them faces any criminal charges. To make matters even worse, the Justice Department pronounces itself "very satisfied" with the work of its Enron Task Force. This task force has secured indictments of 19 former executives. Is this a justice system with integrity?

You asked several questions. The last one asks about the integrity of the justice system. In a word, the answer is YES, there is integrity in our system. Were it not the case, questions like yours and columns like mine would never be in print. We do have freedom of the press in the United States and we can ask hard questions, openly.

Take heart, it is not over for Skilling and Lay, at least, not yet. Apart from headlines, the investigation continues. Many students of the law who are observers of the Enron mess believe that criminal charges may yet be filed against one or both of these individuals, and relatively soon. If you are frustrated by the very slow pace of the investigation, you are not alone. The eight or nine federal prosecutors who make up the task force of the Justice Department have been assisted by about 30 agents of the Federal Bureau of Investigation. They have been working on this case since January 2002. These kinds of investigations are complicated and take time.

Progress is being made: Andrew Fastow, Enron's former chief financial officer, faces 99 counts ranging from obstruction of justice to money laundering. Also, a result of this investigative process, Enron's auditor, Arthur Andersen, was found guilty in a June, 2002, in a jury trial of obstruction of justice.

There are reports that Mr. Lay, 61, loomed large in Houston philanthropic circles and was a top contributor to President Bush's 2000 campaign. Both Skilling and Lay maintain that they knew nothing about the fraud of Enron.

If there was fraud, and there is little evidence to deny gross mismanagement, perhaps criminal intent, by those leading Enron, and still they say that they knew nothing about it, then their board should have fired them for incompetence. If they did have knowledge and are lying, then the justice system can address appropriate penalties. If the leaders knew, and the members of the board knew, and no one blew the whistle, then our federal prisons systems may consider building lots more cells. So very much of what makes our country "tick" revolves around uncomplicated behaviors: we make promises and we keep them. We go the extra mile when necessary and we support one another in hard times. We enjoy success and we avoid excess. We value employees and serve customers. Leaders own the defeats and failures and pass along to others the credit for victories.

When these unwritten rules of management and labor integrity are broken, our system of checks and balances will rise up to make things right. Integrity-centered responsibility reminds each and every participant in the free market system that we must maintain the proper balance between legitimate self-interest and social responsibility. Destructive and self-serving greed must be regulated.

Community involvement, the dues we pay for the privileges of economic and personal fulfillment, must be encouraged. When our system misses the mark and does not live up to its promises for every citizen, then we must stand up and be counted. Phrases like "whistle blowers" and "snitches" need to be replaced with more appropriate and noble terms like "character coaches" and "mentors of the free market" - for the magic of renewing our society rests with how we accept important and inevitable input, even when it is critical. We must be willing to hear the evil, see the evil and then make it better.

Question: (E-062)

"Younger executives and integrity"

Dear Jim:

I am a 52 year-old president of a pretty successful young semiconductor company. Of the twenty companies the venture capital group who funded us has helped to launch, ours is currently the most successful. We have an industry-wide reputation for excellent product and service quality; five quarters of strong profitability; good prospects for the future; employee and customer loyalty; and, an experienced and professional management team. We are doing well.

Here is my problem: recently, with 19 other colleagues, each a president of a company in this venture capital firm's portfolio, we were invited to attend a conference where each of us was asked to mention the key attribute for building a successful company. Perhaps it was because I was the oldest executive at the meeting, for my opinion was the first one requested to start the conversation. Without hesitation, I nominated my number one leadership success attribute: INTEGRITY. Can you imagine my shock when more than half of my peers, mostly in their mid to late 30's laughed out-loud? A few others snickered. And the group rushed to replace my word choice of integrity and fill the unsettling silence with other terms like: intensity, competitiveness, long hours, intellect, power network, and a respected MBA.

What is wrong when this type of thinking becomes the norm? Don't people care about integrity?

Everything is wrong when those with power, who are also in authority, refuse to respect the human equation in success of any kind. Too many people with executive titles admire rude, calculating and self-serving behavior. Unfortunately, your experience with certain of your colleagues is not unique to business and management. Fortunately, ruthlessness is not yet the norm; but, it is gaining on decency. Even so, a significant number of people still care about integrity.

Just a few weeks ago, the sports news told of a recent high-school graduate being drafted into the National Basketball Association. Instead of paying tribute to his coaches, who helped him refine his skills over the years, he thanked himself. Rather than offer any appreciation for family and friends who may have gone the extra mile for this gifted young man, he congratulated himself. This is the behavior of someone who believes he is truly self-made. Immature, short-sighted and selfish are terms that come to mind. Another description of this style is arrogant. Unfortunately, this self-centered behavior often continues into adulthood. Sometimes selfishness is obvious in the greed of those gaining wealth and power, made even more obvious by their cruel and vicious comments to those whose values differ from their own. Other times, self-serving behaviors can be seen in temper tantrums by "adults" behaving like over-indulged children.

Have you ever played golf with a club thrower? They hit a shot that disappoints them and they let fly; sometimes with brutal language, and at other times with a club. They have allowed their emotions to get the better of them. They fly off the handle. For those who have taken golf lessons, they know that it can be very difficult to predict where a golf club will land once it has been tossed. Controlling a club toss would be made even more unpredictable were the individual upset. I happen to know that club throwing, of any kind, is a dangerous luxury.

At age 15, living in Macon, Missouri, one of my favorite summertime activities was playing croquet. I loved to practice rolling the ball across the lawn and making an excellent cross-court shot. One warm August afternoon, alone at practice, a neighborhood dog chose "my croquet court" for his afternoon break. In times past, cleaning up after the animal was not so serious, a minor intrusion on practice time. However, dusk only allowed a few more rounds and I was not willing to allow the dog his space. So, unsuccessful in chasing the dog away with a yell, I tossed the wooden croquet mallet in the general direction of the invader.

Unbelievably, the handle of the mallet hit the ground and catapulted thirty feet sideways, stunning our neighbor's family pet. Being thirty feet off line is no surprise to me, especially when I recall some of my golf shots these days. Shocked and panicked, I ran to the animal, carried him to the neighbor's front door and explained in tearful apology what happened to their dog, and accompanied them to the veterinarian. Then came the long walk home; where, my parents had been horrified and embarrassed observers. Suffice it to say, I was grounded, with no croquet for quite a while. But, the lesson about self control has never left me. It is not the right thing to do.

Sometimes damaging behavior is obvious, such as when we see a golf club or croquet mallet thrown. Other times, we might injure those within earshot with a verbal hand-grenade, a yell, a cutting comment or condescending laugh. Immature and cruel behavior rots the roots of confidence so necessary for healthy relationships and for those building integrity-centered enterprises.

So, think before acting verbally and non-verbally. These are tough times for many people. So, listen carefully and caringly to others before reacting and minimize premature and immature responses. Don't carelessly throw a condemning word at a well-meaning colleague.

Please remember: Integrity is the keystone of leadership. It is reflected in discussions, decisions, directives and diagnostics. Leadership emerges from listening, demonstrates character in behavior, and leverages energy with integrity. Integrity is the stabilizing factor that sustains effort and causes energy to create the canopy for accomplishment. Integrity enables the achievement of Vision. Because integrity matters, lend support and add strength to those building for the future.

Question: (E-063)
published in Jim Bracher's Integrity Matters newspaper column on August 20, 2003

"Integrity of a sport in the hands of the players"

Dear Jim:

The newspaper today had an article in the sports section which described how Winston Cup driver Jimmy Spencer rear-ended fellow driver Kurt Busch at the Michigan International Speedway in pit row after the race and then got out of his race car, ran to Busch's car, reached in and punched Busch several times before being restrained. Busch reportedly has a broken nose. One or more other drivers were said to have supported Jimmy Spencer, which seems to reward irresponsible behavior. What does this say about the integrity of this sport?

First, one person losing his temper is not saying anything negative about an entire sport. Two individuals were engaged in an altercation. Yes, immature behavior does say something about those who are engaged in it. These two world-class racecar drivers, Busch and Spencer, have had run-ins on the track in the past. In March 2002, at Bristol Motor Speedway, Busch bumped past Spencer to get his first Winston Cup victory. There have been several on-course incidents since, but not physical confrontations.

Allowing competitive frustrations to boil over into violent acts defeats the purpose of sports competition. Once upon a time, sports were viewed as the socially acceptable way for warring factions, even ancient cities, to work out their frustrations with one another. Bragging rights on the sports field replaced dead bodies on the battlefield. We hope our progress in the past continues and does not regress in to random acts of violence, road rage being but one example.

Second, having attended a NASCAR race, the Brickyard 400 at Indianapolis, it is incredible that more bumps don't become catastrophes. Lots of money is at stake for each finishing position, to say nothing of the points earned for standings in the annual championship race. Points mean dollars, millions and millions of them. Being pushed out of contention, inappropriately, is serious business. These automobiles move like rockets with wheels, only inches from one another, sometimes three across into skidding turns. Competition is fierce. The physical and mental stresses must be overwhelming. Any mistake or miscalculation can risk significant rewards, even life itself. This is not simply a game; it is the livelihood, perhaps even the life, of those capable of handling the competition.

Third, is this the end of the "race-track" feud? Will it now escalate until someone is seriously injured or killed? Cheap shots and cheating in any part of life, including sports, violate the integrity of creating a level playing field. When lethal weapons in a driver's hands, in the form of pieces of steel capable to moving nearly 200 miles per hour, are directed at doing harm, disaster cannot be far behind.

Fifty-four years ago, a neighbor, also four years old at the time, joined me to watch my father build a fence. Dad was busy digging holes, placing posts in the ground and nailing boards. For some reason the little fellow, Jimmy, decided to see if the hammer my father had be using would reshape the back of my skull. It did. My scream alerted Dad that all was not well. Blood streaming down my face was a problem. As he carried me toward the car, on the way to the hospital, the mother of the little Jimmy "hammer slammer" was heard asking in a loud voice, "Who hit first?" Both of my parents told many years later that they had been horrified with the response.

It did not last for a long time, but little Jimmy and I did not play together for a while. And when we did, things were back to normal, except for the bump on my head. Even so, it was never appropriate for me to retaliate. Nor did my parents carry a grudge. Rather, the incident in our family was a lesson in manners, graciousness and care for those about us: both parents and children. Misjudgments happen. Young people and adults make mistakes. Situations find remedies. And, so too should the folks at NASCAR. We are taught that two wrongs do not make a right. Integrity matters.

Question: (E-064)
published in Jim Bracher's Integrity Matters newspaper column on August 27, 2003

"Like or not, telemarketers have job to do"

Dear Jim:

My telephone still rings, night after night, with pushy telemarketers. I thought some laws were passed that had put a stop to their calls. But, they still call when we are eating dinner and sometimes after we have gone to bed. I work an early shift and sometimes am exhausted by 9:00 p.m.; and they call as late as 9:40 at night. Being awakened by a computer-dialed phone is ridiculous. What kinds of people expect others to buy from them when they are constantly hounding us at night? Isn't there something wrong with their integrity when they operate like this? I don't even want them to call me and I am not sure how to get rid of them. Slamming the phone down is wrong, but what else can I do? My own way of treating people does not allow me to be rude, but this type of abuse is wrong. Can you help me?

The telemarketing industry has become more aggressive in recent years. Its intensity and insensitivity have caused many of its potential clients and customers to react in ways similar to your own. You are not alone in being frustrated and irritated by their intrusive and incessant calling. They have seemed to be operating without any regard to the consumers. Comedians have made jokes about this process and have suggested placing the receiver of the phone down, after they interrupt your evening, and indicate that you need to pick up a pencil and paper, only to ignore them until the line goes dead - wasting their time and reducing your stress by not listening to them.

Humorous as this might appear, it is not a proper response; certainly it is not integrity-centered. Such tempting behavior is not gracious. Those who are working for a telemarketing firm need to find customers. This is how they are trying to make a living and it is not appropriate to make their lives miserable because their approach is making our lives miserable. And even if we are upset that they are wasting our time, still we ought not to get-back at them with a time-wasting prank.

There is a better way, really an integrity-centered way, to handle unwanted phone solicitation. As you may know, on October 1, 2003, a new law goes into effect, as a part of the "National Do Not Call Registry"- and it will fine telemarketers as much as $11,000 each time they call someone listed on the federal do-not-call listing. The Federal Trade Commission is offering a toll free number and access to a website to STOP THE CALLS. Here is how to register with the Do Not Call Registry: (888) 382-1222; or register through the web at:

One good reason to act soon is that consumers, like you and me, must sign up by August 31, 2003, to be on the registry by October 1, 2003. Those who sign up thereafter will have to wait three months before their numbers appear on the registry. In the coming weeks, households can expect to be deluged with phone solicitations as telemarketers try to establish relationships before the registry goes into effect. The FTC already is getting reports that telemarketing call volume has soared. And, after October 1, those who have not signed up for the registry can expect a flood of calls as marketers zero in on them.

According to a Los Angeles Times news story, written by David Streitfeld, the telemarketers are pleased with this new regulation. At least that is what the spokespeople are saying. They say it will greatly simplify their operations by drawing a line between those who don't want to be called and all the others, who the telemarketers will assume are eager to talk. Some of the major telemarketers support the registry because they say that they believe in the consumers' right to be left alone.

However, these same organizations have lobbyists who feel differently. The American Teleservices and Direct Marketing associations have filed lawsuits to stop the registry which they say is a violation of free speech. They also say that the registry will ruin the telemarketing industry.

Because the telemarketing industry did not regulate itself, (it became too intrusive and abusive of people's time at home, especially during the evening); then the government stepped in with a legislative response; specifically, The Do Not Call Registry. The people, you and others, know that when free markets do not regulate themselves, then those frustrations will be communicated to those in authority, essentially asking and demanding the necessary controls be instituted by the government. Here is an instance where our government has responded with controls and regulations.

Question: (E-065)

"Coca-Cola Executive Resigns After Scandal"

Dear Jim:

In the Business section of The Californian on Tuesday, August 26, 2003, it was reported that a Coca-Cola executive, Mr. Tom Moore, oversaw the division that rigged a marketing test to fool Burger King and will step down from his position. His actions were described as a scandal. Mr. Moore, president of the foodservice and hospitality division of Coke, the world's largest beverage maker, will remain at the company to train his successor, Mr. Chris Lowe.

If he was cheating a client by rigging test results, what is the company thinking about when it decides to have him train his successor? What message are they sending? Is this integrity-centered leadership by Coca-Cola?

No, it is not. Coke admitted in June that some of its workers manipulated the results of a test of the frozen soft drink in 2000 to win Burger King's business. Allegations of fraud by a former Coca-Cola employee resulted in a federal grand jury probe. Earlier this month (August of 2003), Coca-Cola agreed to pay Burger King and its operators more than $20 million to settle a dispute over the rigged test.

To drive the point home and clarify why an integrity-centered standard might improve the behavior of corporate leadership, let's look at this response by Coca-Cola's actions in this situation and evaluate them according to these eight attributes:

1. CHARACTER: consistency between word and deed.
Did the leaders of Coca-Cola exhibit congruence between what they say and what
they do, as well as what they say about what they did? Do leaders exhibit the right

2. HONESTY: truthful communication.
Do you still have confidence that Coke's leaders would never engage in or sanction misrepresentation? Answer: CREDIBILITY IS DAMAGED

3. OPENNESS: operational transparency.
Is appropriate information about the way Coca-Cola handled this situation readily available? Answer: PROBABLY YES, BUT PERHAPS ONLY BECAUSE OF THE RULE OF LAW AND THE MEDIA COVERAGE

4. AUTHORITY: employee encouragement.
Are Coca-Cola employees able to correct a customer problem, including fraudulent test results reporting? Do these employees have confidence that their actions will be supported? Answer: UNCLEAR FROM THIS EVENT

5. PARTNERSHIP: honor obligations.
Does Coca-Cola pride itself on timely fulfillment of all commitments?

6. PERFORMANCE: accountability throughout the organization.
When individuals, including senior executives, under-perform repeatedly, are they given due process and then, if necessary, replaced? Answer: FROM PUBLISHED ACCOUNTS, THE ANSWER WOULD SEEM TO BE "NO."

7. CHARITY: generous community stewardship.
Does your organization reach out to those in need? Answer: UNCLEAR FROM THIS SITUATION AND NOT DIRECTLY RELATED TO COKE'S CHARITIES

8. GRACIOUSNESS: respect and discipline.
Did Coca-Cola demonstrate care and concern for all stakeholders? Answer: FROM PUBLISHED ACCOUNTS, THE ANSWER WOULD SEEM TO BE "NO."

Coca-Cola knows proper behavior, as do most institutions. In this situation they forgot to implement their own core values and their culture might have been better served if they had immediately discharged the offending executive, to ensure that the right message was given internally. We must remember that employees observe not only the fraudulent behavior of the executive, but watch carefully and learn from the organization's response. By keeping the offender on long enough to train a replacement, Coke might have given the message that the only thing wrong with what he did was getting caught at it. The key to restoring trust throughout our society centers in doing what we know to be right. Not once; all the time, every time. Remember, Integrity Matters.

Question: (E-066)
published in Jim Bracher's Integrity Matters newspaper column on September 10, 2003

"NYSE chief's big payday smells fishy"

The board of the New York Stock Exchange decided to pay its top administrator a gigantic amount of money. Perhaps you will comment on the $140 million accumulated back pay and benefits paid to Richard Grasso, chairman and chief executive. Who will pay for these obscene fees? It is the little people, yet again.

Chairman Richard Grasso's acceptance of the $139.5 million has reignited the debate over standards of governance at the world's largest stock exchange. His package is greater than the NYSE's total net income for the past three years. Though perfectly legal, the huge payout feeds the public's perception of Wall Street as a rigged game that enriches a few big players, while small investors get bilked.

Who is responsible for this gigantic compensation? It's the Board of Directors of the New York Stock Exchange. The board appears to have acted very generously, possibly irresponsibly, certainly insensitively. For starters those rewarding Grasso (the compensation committee and board) are individuals and organizations over whom he has regulatory authority and responsibility. This has some parallel to a group of motorists directly rewarding the police officer who has the authority to enforce traffic laws.

Where the money is coming from might become clearer when we know that a group of 1,366 seat-holders of the NYSE is planning a lawsuit for force Grasso to renegotiate his controversial pay package. If they feel on the hook for Grasso's wind-fall then some of their customers -- e.g. individual investors --may feel the sting of costs that can be legally passed along.

Here is what we do know: Free markets must regulate themselves or governments will. It does not take a rocket scientist to recognize that oversight committees and other similarly chartered organizations have a responsibility to protect themselves and the public from both real and perceived of conflicts of interest. Whether Grasso is overpaid is not the concern of this column. However, the appearance of becoming compromised in the pursuit of oversight harms the enterprise and can demoralize an investing public already discouraged by the bombardment of news that continues reporting scandalous behaviors throughout our society.

By way of summary, here are some of the integrity-related leadership issues:

Grasso's first duty is to set a good example. His pay package does anything but. It serves as a tacit endorsement of NYSE companies that have paid executives lavishly while their firms have languished. His acceptance of a big payment financed by the companies he regulates creates the appearance of a conflict of interest.
Worst of all, though, Grasso's pay undermines the NYSE's own efforts to promote corporate reform. It has offered a number of proposals to encourage corporate boards to stand up to their CEOs and hold top executives more accountable. Yet the nine-figure compensation suggests a board only too eager to please its own chairman.
Greed is hardly new or surprising. But its display by a public watchdog such as the New York Stock Exchange suggests Wall Street may still have a long way to go to clean up its act. When leaders ignore the importance of maintaining a proper balance between self-interest and social responsibility, the free market is at risk.

Question: (E-067)
published in Jim Bracher's Integrity Matters newspaper column on September 17, 2003

"It's essential for our culture to curb greed"

Dear Jim:

You are a consultant. What is your response about the level of integrity exhibited by the Wall Street consultant-economist, Peter Davis, who has pleaded guilty to fraud and conspiracy? According to what has been written, he attended confidential Treasury Department news conferences and then rushed, using a cell phone, to notify Goldman Sachs about sensitive, advance information regarding the bond market, where they made $3.8 million in illegal profits. It seems that the extra-eight minute edge on the rest of the market that his information provided to the crooks at Goldman Sachs was enough time to provide this wealthy firm with even more profit taking opportunities. Is this behavior common place on Wall Street? What does this behavior say about consultants?

Dear Wall Street Observer,

Integrity is never for sale. Mr. Peter Davis has admitted that he is guilty of violating trust and cheating. He deserves to suffer the consequences of his actions. However, what about his fellow participants from Goldman Sachs? They accepted illegal insider information. How disappointing for the financial industry and our society. This particular incident comes on the heels of the board of directors of the New York Stock Exchange approving a $139.5 million controversial pay package for its chief executive, Mr. Richard Grasso. Neither of these events will help restore confidence in the leadership of our nation's investment community. Without a balance between self-interest and social responsibility, greed displaces responsible leadership behavior.

Honest individuals, in any walk of life, including consultants like me, are diminished by the destructive and selfish behaviors of those who work in their field of endeavor. A colleague who violates accepted standards of conduct infects reputation and stature, sometimes a little and at other times, very seriously. Corruption and misbehavior, whether illegal or simply inappropriate, erode confidence and trust between and among members of a community -whether small or large, business or social, political or religious. What each person says and does really matters.

The good news, according to a report from the Associated Press, about this situation is that the United States Attorney, Mr. James Comey has said, "A scheme to steal confidential information from the Treasury Department and tip off others shakes the confidence of the investing public and it is not to be tolerated." Mr. Davis violated the embargo, meaning that he was obligated not to disclose any information ahead of time.

The proof of Mr. Comey's comments regarding not tolerating such behavior will become real when those who were involved with Mr. Davis, from Goldman Sachs, are identified and dealt with effectively. Until this type of behavior is rooted out and all participants are brought to justice, the word scapegoat is not far below the surface. Controlling greed and selfishness is essential in order for our culture to be sustained. Democracy and free market capitalism depend upon the constancy of integrity - throughout the system. Integrity is the keystone for sustaining our social, economic, and cultural structure.

Question: (E-068)
published in Jim Bracher's Integrity Matters newspaper column on November 19, 2003

"Working relationships require some give, take"

Dear Jim:

Is this an integrity issue? My boss expects me to be on time, every time. She is almost never on time for her meetings with me. My frustration is that when her schedule messes up mine, the people who depend on me to not make them wait; well, they get upset with me. If I say anything about my boss not being respectful of my time and how that causes me to be late and disrespectful to others, then I am being unprofessional and disloyal. I have mentioned to her my commitment to not make others wait. She nods and continues her meeting. Abuse of time is not right. Is this violating integrity? Certainly, time costs money. Wasting other people's time is irresponsible.

Many wise leaders believe that working effectively requires relationships built upon respect and trust. Pressure to perform is great enough without adding the stresses related to making others wait simply because time commitments are ignored. Emergencies are understood to be the exception. However, some individuals seem to thrive on their tight and tardy schedules. Flying in at the last minute, scrambling for papers and reports, they destroy whatever order might have been necessary for others to function productively.

To make matters worse, many flagrant violators of time seem oblivious to the pain they cause others. This insensitivity runs head-first into how partners - whether colleagues or bosses, friends or family members - ought to treat one another to enhance trust, respect and productivity. The snowball rolling down the hill is what happens. By the end of the working day, those affected by the clock-wasters can be demoralized. Their plans for managing their efforts have been interrupted, even destroyed. Expending energies in shuffling and adjusting schedules to accommodate the undisciplined leaders takes a toll.

Is such behavior an integrity issue? Yes. Each partner in a relationship, at work or at home, professional or personal, is obligated to show appreciation for the needs of the other. Wasting time, needlessly, is destructive. Partners cannot plan with confidence how best to use their energies. Subordinates in an organization will not maximize productivity when commitments are missed, especially time commitments. Mutual respect suffers. Attitudes of those whose schedules are torn apart will seldom improve.

So, what can be done? Start and end your own meetings on time. Clarify to those who violate time that you need to know what level of rudeness that they find acceptable. If their definition is different from yours, then you will need to make a decision about the lengths to which you will go to keep the relationship alive (personal or professional). After asking for tardy people to behave differently and finding responses unsatisfactory, you will know what to do. If an individual or an organization does not have pride on the timely fulfillment of all commitments, including time, then partnership is difficult, if not impossible. Respect time is an integrity matter. Partners honor obligations.

Question: (E-069)
published in Jim Bracher's Integrity Matters newspaper column on September 25, 2003

"Accountability and Leadership"

Dear Jim:

I work for an executive who has always been held in high esteem, but just recently he submitted an expense item for me to o.k., for reimbursement, that I believe to be personal. This involved an expensive dinner with friends and for which there was no business purpose, not even relationship-building, as their personal friendship is well established. Of course, he could and no doubt would justify it as a legitimate business expense if challenged, and my push back would be seen as a complaint. Chances are that the conversation between us would not yield any results other than irritation for everyone concerned.

Dear Reader,

When someone who has been held in high esteem disappoints us, it is natural to feel disappointment, sometimes even anger. When we perceive values, small or large, are violated, one or both of the parties involved can feel a tear in the relationship-fabric of mutual faith and confidence. The breaking of a trust, in this instance, the inappropriate use of company funds, can signal that a halo of an individual with perceived integrity was tarnished. Casual or irresponsible behavior about what is and what is not a proper use of a business expense account can shatter an otherwise worthy reputation. It sounds as if your role in the company places you in a position to exercise your fiduciary responsibility for the conduct of others, even some who are held in high esteem.

You have determined that this individual has exercised poor judgment. Without knowing your area of responsibility, it sounds as if you are simply carrying out tasks related to your job. You are sensitive to wasting money, at any level and for any reason. You are looking out for the stockholders' interests who expect responsible management to be good stewards of their investment dollars. Further, without profits and proper cash flow, financial abuses will lower profits and risk the jobs of fellow employees. Casual business behaviors are seldom wise and they can be devastating in financial areas, whether on the income or expense side.

But, let's get back to your dilemma. What is the integrity-centered action in this instance? First, let's check this situation carefully. In general, I've found it helpful to view such matters as isolated incidents from this perspective:

If it happens once, it is an event. If it happens twice, it is a pattern. If it happens a third time, it is a habit, and habits are very hard to break.

If the executive in question has not been sloppy with expenses before, then it may be prudent to ask if this expense item was an oversight. If the leader's "halo" is still in place and you are correct that the meal should not be charged to the company, then mentioning the issue should allow the other person, and not you, to rectify the error. Sometimes a simple question, "Did you mean to do this?" will remind the executive that he or she lives in a fishbowl, and that their behavior is being observed and emulated. As a consequence, leaders' behaviors are open to question, if only for clarification. With a basically honorable person, such a reminder will be sufficient. Their response will also tell you a great deal about whether this was an incident, a pattern or a habit. If the executive's behavior is habitual, you will want to extricate yourself from that situation. Sooner or later, habitual abusers of funds, small or large, will do harm to the enterprise. They will create enough distrust that increased regulations will be required and new rules will relationships and stifle motivation. Integrity matters 24 hours a day, 7 days a week. Leaders are role models, for better or worse, on purpose or by accident.

Question: (E-070)
published in Jim Bracher's Integrity Matters newspaper column on October 8, 2003

"Credit card fees preying upon the poor and elderly"

Dear Jim:

Bob Herbert, a writer for the New York Times, states that our "nation is awash in credit debt" and he describes a family trapped in the vicious cycle of escalating costs. He tells the story of Julie and Jerry Pickett of Middletown, Ohio, who are still paying for groceries bought for their family years ago. They are trapped in the iron grasp of credit card debt, and he describes their situation as similar to problems faced in earlier days in this country when poorer people were loan-sharking victims. Are these credit card companies operating with integrity?

Unfortunately, the financial institutions which prey upon the poor would appear to be breaking no laws. Are they operating with integrity? Further analysis of the situation you describe could shed light on the some of the issues.

First, thank you for prompting me to read Mr. Bob Herbert's September 24, 2003, column. What he described was and is disturbing. After reading his thoughts, there are
social issues raised that must not be swept under the rug in the name of making a buck. He tells us that people used to be jailed for what credit-card companies now do legally. While banks and money markets are currently paying little interest to consumers, it is common for the effective annual percentage rate for balances on a friendly credit card to approach 30 percent. In the past this was an illegal practice called usury.

Mr. Herbert's statistics present a grim reality for many in our society. Between 1989 and 2001, "credit-card debt nearly tripled from $238 billion to $692 billion as many people resort to using credit cards to fight the ravages of unemployment and avoid disaster, while others battle the gap between declining real wages and rising home and essential health care costs. The savings rate steadily declined; bankruptcies jumped 125 percent, and the credit-card debt of the average family increased by 53 percent. For middle-class families, the increase was 75 percent. For senior citizens, it was 149 percent; and, families with annual incomes below $10,000 increased a staggering 184 percent.

According to Mr. Herbert, credit card companies have leapt gleefully, into an orgy of exploitation, with late fees the fastest growing source of revenue for the industry. This fee category jumped from $1.7 billion in 1996 to $7.3 billion in 2002. Late fees now average $29, and most cards have reduced the late payment grace period from 14 days to zero days. In addition to charging late fees, the major credit card companies use the first late payment as an excuse to cancel low, introductory rates; often making a zero percent card jump to between 22 and 29 percent. One ought not to assume that all credit card institutions behave this way. The information reported does suggest that increased monitoring might be constructive.

Since high rates are now legal, we must appeal to some sense of fair play, of ethical and moral behavior. Right thinking cannot accept this endless and costly treadmill for the less fortunate. It is not an appropriate dilemma for the poor, the less educated or the elderly. Something is "out of whack" when shrewd and financially-gifted business decision-makers take advantage of the misery and misfortune of others. If such cruel and heartless business practices continue, free markets will suffer. Trust will deteriorate, even further. The hope for living the American dream might seem further away, and the children of our grandchildren might only read in history books what could have been their birthright: freedom and free markets! Simply because high rates are legal does not make them right. Integrity suggests that credit card institutions could lead the way in offering constructive solutions for these borrowers before it is too late. Here is an illustration where there is a real need to balance self-interest with social responsibility.

Without a motivated middle class there is no stability for this or any society. When the erosion of confidence out-paces the reward systems in place, chaos might become a way of life. Without mutual trust throughout our social and economic system, productivity declines along with confidence and motivation. Regulations can never replace relationships. However, when forced into a survival mode by greedy lenders, law makers will be forced to further regulate behaviors. There is still time to make things right and those who operate with and demand integrity-centered leadership behavior will need to lead the way. If those who prey upon the less fortunate do not change their ways, our society will wake up and demand even more stifling regulations, adding bureaucracy, with other, unanticipated, consequences. Unless behavior changes, regulation may be the only way out of the current abusive mess. Free markets must regulate themselves, or governments will. Integrity is what matters.

Question: (E-071)
published in Jim Bracher's Integrity Matters newspaper column on October 15, 2003

"Profanity on Network Television"

I do not blush when people use rough language, but are you aware of the words polluting prime-time television? In fact, Parents Television Council (PTC), a watchdog group reports that during the early evening hours from 8 to 9p.m., the so-called "family hour" - foul language increased by 94.8% between 1998 and 2002; and it grew by 109% during the 9 p.m. hour in the same period. The jump in profanity occurred on "virtually every network" and in every time slot.

How do we protect our young from this foul language? This is more than dumbing-down; this is pollution, filth and culture assassination coming into our own homes. Where is the integrity of television?

Integrity is very much at the heart of this issue, on several levels.

First, society appears to have become more aggressive, language has hardened and so have our levels of tolerance for harsh vocabulary. Perhaps the question to be addressed is this: does television lead society or reflect the behaviors of the public? It starts with language used by parents with children. If you have not gone to an amusement park in a few years, prepare yourself for some shocking experiences.

Recently, my wife and I were checking in at the Boston's Logan Airport. About five minutes into our wait, a woman and teenage boy began screaming at one another The violent language escalated into ugly behaviors between what we learned a few minutes later was a mother and her son. We picked up our carry-on luggage preparing to move toward safety, unsure of events.

The lobby area was filled with hundreds of travelers. A hush settled into this disturbing environment. The many agents at the check-in counters stopped processing passengers. Then, the teenager abruptly exited from the area; an airline employee assisted the distraught woman. As we reached the counter, the reasons for the rude son and the angry mother's behavior was made clear. The agents at the counter were ready to throttle the youngster and were saddened that the mother had suffered such embarrassment. The boy had begun screaming at his mother for being too stupid to check-in electronically. Unable to complete the transaction, she retaliated,
and the battle was on. The agents felt she had every right to yell back. The mother and son's language that morning was worse than anything we have ever heard on television.

How parents ought to behave is a topic for another column. This particular mother-son event did not erupt in isolation. It could not have been pleasant for either participant, nor certainly for those observing. One can hope that children witnessing these awful

behaviors were soon reassured by more nurturing parents. Unlike television, this drama could not be turned off or unplugged.

Second, today's television family hour has more than three channel options. So, the profanity statistics may be drawing dramatic conclusions about increases in profanity that may not reflect the reality of people's channel selections. Further. television has too often become a baby-sitter, mesmerizing children with its multi-sensory charms as parents have abdicate responsibility what is shown in their homes. Whose integrity is on trial? Parents or the corporation selling programs that the buying public is demanding? Frankly, when we do not like a program, we can change channels—or even turn off the television. We can remember that reading, listening to music, and sharing ideas are all positive by-products of a non-television evening.

Keep in mind that if television programs were not satisfying sponsors, they would change. After all, those who sponsor programs on television do market research to ensure that their advertising dollars attract more customers. Somehow, the economic system of television is meeting market needs. If television programs are not satisfying your needs, then pull the plug. And, if that does not satisfy you, then write to local station managers and elected officials and make your concerns known

Third, if television does not regulate itself in relation to society's values, then regulators will. But there is this question of you: does television pollute the culture or has the deteriorating values of the society set the tone? Our recent experience in an airport lobby may not be unique. It is time for social behavior, even within a family, to become more gracious and less destructive. Decide to exhibit interpersonal integrity all the time, monitor what programs are acceptable in your home; foster this commitment among your friends and associates, and anticipate that the television industry will follow. When good taste dominates our culture, smart business will fall into line.

Question: (E-072)
published in Jim Bracher's Integrity Matters newspaper column on October 18, 2003

"Board of Directors and Integrity"

Mr. Grasso is history, at least as far as the New York Stock Exchange is concerned. While Mr. Grasso may be guilty of helping design an overly generous compensation program for himself at the expense of his member companies (and therefore widows, orphans and pension funds), the real culprits are the directors of the NYSE approved the plans. These directors clearly failed to do their job. How would you describe a good director for a good board at a good company?

You have asked for answers to three questions, about what makes for a good director, a good board and a good company. The answers involve integrity-centered leadership behaviors.

First, we look at good directors. They are effective based upon their insight, impact, and integrity. Good directors understand the company (its products, services, markets and financial health); respond to the needs of all stakeholders; and, exhibit courage even in the face of strong opposition.

Good directors work hard to understand the enterprise and management that they have been asked to guide. Directors hire and fire chief executives and set their pay packages. They earn their own salaries by preparing for and responsibly attending their board and committee meetings. Good directors are committed to the effectiveness of their involvement. They wrestle hard issues to the ground and do not rest until proper resolution has been attained. Good directors seldom plead ignorance. They do exhibit courage.

Let us look at some recent high profile scandals. In the Enron debacle, the outside directors didn't dig deeply enough to understand and question the complex financial structures that were created and the risks associated with them. In the case of the NYSE there may have been an integrity issue since many of the board members were employed by the very companies that they, the NYSE and Mr. Grasso were charged with regulating. In the cases of WorldCom and Tyco the directors apparently knew about the loans to Ebbers and excesses by Kozloski but did not courageously confront something they knew was wrong. In the case of the insider case against Martha Stewart, the allegations suggest that integrity was ignored in favor of greed.

What is so striking about these headline cases suggesting impropriety, misbehavior or malfeasance is the similarity of the creeping scandalous behavior to the description of the five progressive stages of intoxication:

  • stage one, after several drinks, the drinker becomes clever;
  • stage two, a couple of more drinks, the drinker becomes charming and affectionate;
  • stage three, as alcoholic consumption continues, the drinker believes that no one can see their clumsy behaviors or notice the slurring of words;
  • stage four the alcohol level rises, and the partaker is now convinced of their own invincibility and immunity to rules that apply to others;
  • stage five, the lights begin to go out and the behavior spirals out of control. The substance abuser may well end up in a cell doing time, either because of actual harm caused to others, or because of the violation of public drunkenness laws.

We have seen one small step of greed or power after another leading to the scandals that parallel intoxication. This demonstrates that power may insidiously corrupt those who attain it. And again, with the Sarbanes Oxley Act, we see that unless individuals and institutions regulate themselves, governments will.

A good director, then, is that person whose character, values, insight and knowledge create positive and purposeful influence with colleagues on the board.

On the subject of a good board, these exhibit and encourage independence, interdependence, directness (confrontation) and relationships built upon mutual trust and respect. 75% of the board members should be outsiders. No Board member should be so captivated by the organization's influence, or that of suppliers or customers, that alignment with the needs of shareholders and other stakeholders is compromised. Good boards want and need oversight, never to be rubber stamps for powerful executives and their teams. This professional independence does not mean that a bank's board member might not have a small account at the bank, or that a board member of General Electric might not have been using GE light bulbs or watching NBC television stations. Nor does this independence require an adversarial board atmosphere. Independence simply means providing the environment for confronting issues openly and honestly, all the time.

Interdependence is also a hallmark of good boards. Being a strategic partner with management is important. Company managements need the strategic insights, ideas, experience and referrals that a good, yet diverse, board can provide. To be a source of ideas, which a good board is, the relationships must provide for responsible give and take.

Good boards attract and retain individuals who are able to get along, enjoy one another, even in the midst of strongly differing positions, sustain substantive relationships built upon mutual respect and trust. Good boards communicate their own healthy culture of integrity that includes how they work together, through tough issues, in a climate that combines fiduciary responsibility and stakeholder sensitivity. Good boards insist upon adherence to the mission of the enterprise, as it is fulfilled in all activities of the organization.

The diversity of good boards enables creativity, connections, cultural and market insight, advice, and counsel. Similarly, good boards are not afraid to tackle tough issues, openly. Debate, which implies differing positions, is essential, not optional. It is important to remember that our college and university students are being taught by their professors and from their text books that "the board of directors is a group of elected individuals whose primary responsibility is to act in the owners' interests by formally monitoring and controlling the corporation's top-level executives." (from Strategic Management, 2003, p. 319; by Hitt, Ireland and Hoskinson) .

The third question, that of a good company is answered as one that does what it says it will do, and tells the truth about what it does, seven days a week and fifty-two weeks a year. The good company is integrity-centered and exhibits behaviors that enable its stakeholders to answer yes to the questions that reflect the eight attributes of an integrity-centered company developed by the Bracher Center.

  1. CHARACTER: consistency between word and deed.
    • Do the leaders of your organization exhibit congruence between what they say and what they do, as well as what they say about what they did?
  2. HONESTY: truthful communication.
    • Do you have confidence that your leaders would never engage in or sanction misrepresentation?
  3. OPENNESS: operational transparency.
    • Is appropriate information about your organization readily available?
  4. AUTHORITY: employee encouragement.
    • Are you able to correct a customer problem? Do you have confidence that your actions will be supported?
  5. PARTNERSHIP: honor obligations.
    • Does your organization pride itself on the timely fulfillment of all commitments?
  6. PERFORMANCE: accountability throughout the organization.
    • If individuals, including senior executives, under-perform repeatedly, are they given due process and then, if necessary, replaced?
  7. CHARITY: generous community stewardship.
    • Does your organization reach out to those in need?
  8. GRACIOUSNESS: respect and discipline.
    • Does your organization demonstrate care and concern for all stakeholders?

When you find an organization, a good company, that exhibits these attributes, there is a good chance, quite probable in fact, that they will have a good board and good directors.

Question: (E-073)
published in Jim Bracher's Integrity Matters newspaper column on October 22, 2003

"Parents, don't do the homework for your children"

My daughter came home with a story that is appalling to me. Her friend in her English class at our local high school turned in a paper on the Supreme Court and received the only "A" in the class. When I told my daughter, "That's wonderful," she quickly took issue, and said that her friend's mother actually wrote it for her daughter, because the girl was behind, frantic, and besides, the girl knew her mother would do it for her .

Jim, what chance does that girl have, if she always finds someone to do her work for her? Where is our country's future if the young children of today are taught that this form of parental fraud is ok?

This is a disappointing story. Assuming your daughter has the facts accurately, then we are looking at lying, cheating, stealing and negligence. Your daughter's friend has a mother who has abdicated leadership responsibilities as a parent and citizen. Your daughter's friend has been taught that cheating is ok in order to win; some other child has likely been denied the recognition of having created the best paper. This is simply an awful representation of gross negligence of parental responsibility.

The daughter is being taught by this example, to lie to people in positions of responsibility in order to achieve recognition. She now knows how to avoid commitments. She is being shown how to cheat the system in order to win, and worse, is being assisted in the fraud by her own mother. Parental negligence is apparent; this young woman is at risk in lots of ways.

Parental responsibilities include teaching accountability. Poor school habits have long-term negative consequences, and should not be replaced by parental interference. Instead of holding her daughter accountable, this selfish and shortsighted mother is passing along the dishonesty that is eating away at our society. This daughter has been enabled to betray her responsibility to learn and to perform. She has broken her trust with her teacher. And, her very own mother is helping her to run even further from responsibility. This mother and daughter need help.

However, you can turn this into a learning experience for your own daughter, using it as a way to put across the values that you obviously hold, of honesty, accountability and character. Consider asking your daughter to think through whether she should be associating herself with so-called friends who lack the integrity to do their own work, and ask her whether her cheating friend could be counted upon to be honorable in defense of her friends? Would she ever again trust this girl when she might be saying "I did this?" Let us hope that the larger share of your daughter's friends hold to a higher standard than represented by this story; and you make sure to use this episode as a way to help your daughter appreciate the value of integrity.

Without the keystone of integrity beginning within the family, the structures of our society are at risk. In this particular set of circumstances, there is a real issue for this family, the individuals who know this story, and the people touched by this young woman in the future. Were this story about drug abuse, involving a parent purchasing and sharing illegal drugs with an under-age family member, one would know immediately which laws were being broken. However, the heady stuff of false achievement introduced by the mother's fraudulent actions beg for discovery, and soon.

Here is the good news: if you explain why you would never sanction such plagiarism, your daughter will have been taught solid values, learned to appreciate the consequences of dishonest behavior, and see you in the light of integrity-centered parenting. Remember, Integrity Matters, all of the time.

Question: (E-074)
published in Jim Bracher's Integrity Matters newspaper column on October 29, 2003

"Athletes using steroids setting a poor example"

I am offended that some of our most gifted and privileged athletes have been using THG, an illegal 'designer' steroid product which avoided detection until now. Athletic competition is supposed to be about fair play, playing by the rules, honor, etc. and not about the race to find the latest molecular wrinkle for a non-detectable performance enhancing drug? What can be done?

Most importantly, society has not lost integrity because self-serving and self-destructive sports figures have chosen to cheat. Yes, certain individuals have elected to break the rules and they set an awful example for their honest peers and more importantly for the younger generation looking toward them as positive role models. One reporter, who was addressing this topic of performance enhancing drugs, suggests that "cheaters will always find another way." Were this about the paying of taxes, one would accuse the person a tax evasion. They might be prosecuted, pay a fine and spend time behind bars; or all three. Even though cheaters will continue to pursue their "corner cutting" methods, all is not lost. Integrity-centered oversight organizations press forward in their relentless pursuit of honesty and fairness. Over and over, our caution is clear: unless free markets (and athletes) regulate themselves, governments will.

Sports competition has become for many only the prelude for entrepreneurial enterprise, leveraging physical talent and competition for financial gain. These peak performers (legal or dishonest) produce profits for powerful partners. For all too many, money displaces medals in the escalating battle for celebrity-driven product sales and profits. Perhaps the distorted thinking of those involved in using illegal substances is similar to other high profile "white collar" criminals. Many of the them seem to feel that if they can siphon off enough in their scams to never need to work again, then they can bask in the glory that greed (at any price) has gained for them. Perhaps the emotional "rush" that is provided by legitimate victory is not enough for them unless it is accompanied with the additional thrill of having "bilked the system" and cheated all of the honest participants whom they might refer to as simply "chumps" – those who play by the rules. Fortunately, we believe the majority still play by the rules.

We are not the first to be concerned about destructive nature of instant gratification. One of the world's significant spiritual movements is Buddhism. Its founder, Gautama Buddha, was born into a wealthy family, with privilege. As his life unfolded he discovered and then rejected what some describe as his four passing sights. We might today refer to these four activities as simply self-absorbing pursuits. What the young Buddha concluded was that these activities, in and of themselves, were leading to dead ends. These four human pursuits were and are impossible to completely satisfy. Individuals seldom can acquire enough of pleasure, wealth, fame and power. A wise advisor cautioned me to be wary of "things" and to be sure to keep a clear distinction between owning things and being owned by them. The challenge is real and seems to never change. "Speed kills" was a phrase from a previous generation and it referred to pushing too hard and demanding too much, of the human body, using drugs. The challenge is the same for world class athletes who are driven in their irrational, mindless and sometimes destructive acquisition performance sports records, of material wealth emerging from medals that lead to gold. How much is enough? At what point is playing by the rules simply the effort of what these con-artists call "suckers"? After all, integrity-centered behavior is exhibited by those whose apparent naive approach often brings condescending smirks from the "street wise" manipulators of the rules and the system? The use of performance-enhancing drugs reflects these misplaced priorities.

Chemical abuse is a disease driven by greed and sets in motion a moral example that must be repudiated if an integrity-centered culture is to survive. Everyone engaged in this form of cheating knows that it is wrong. These are talented and adult participants. They know better. These violators must stop. Right now, in some sports circles, there seems to be little or no self-regulation. However, with current probes into violations and criminal investigations around the next corner, there will emerge more governmental restrictions that could stifle competition and the very spirit essential to maintain a climate where the achievement of excellence is still conducted on a level playing field.

What serious athlete wants to live in a fish bowl of suspicion? Did the winner cheat or play fair? Did they win because of their talent or because their chemist was better at mixing drugs?

What are we teaching the future generations when we reduce life's noble activities, including sports competition, to an equation that always rests upon prestige, bragging rights and ill-gotten financial rewards? Integrity-centered behavior stands for more and so must the generation that is responsible for leadership. Simply stated: play fair and insist on fair play.

Question: (E-075)
published in Jim Bracher's Integrity Matters newspaper column on November 5, 2003

"Just because others cheat on taxes, it doesn't make it right"

Dear Jim:

I read that the number of Americans surveyed who think tax cheating "here and there" is acceptable is up 50% in the past four years. Is that possible? Then I looked further into the matter and found out the 50% increase is less scary when it is understood that the difference in the past four years, since 1999, is simply up from 8% to 12%. Yes, this is a negative trend, but some of the reaction seems overblown. What is the big deal? Doesn't just about everybody do it? Is cutting corners on taxes really so wrong?

If you are upset with the sensational reporting of statistics, you are not alone. You were smart to check the numbers and determine the real story. Yes, an increasing level of tax abuse is a concern. Saying it is up 50% sounds a lot worse than clarifying that the numbers are up 4%. Regardless of the reporting, tax cheating seems to reflect a tone of increasing mistrust and maybe even cynicism in our society. Certainly the lack of headlines announcing convictions related to corporate leadership scandals has done little to re-energize those honest folks who must work hard for their living. Even when substantial fines have been levied and paid by the very institutions that cost investors millions and billions of dollars, many have done so without ever admitting guilt.

Loyal and solid citizens may have developed a belief that accused "big shots" come to trial slowly and then hire expensive and sophisticated lawyers who help them to discover legal loopholes and escape routes that still leave the less wealthy taxpayer holding the bag. Might these "accountability-avoiding" maneuvers by those with power and influence increase anger and bitterness among frustrated observers who are caught in the financial pinch of the recent economic slowdown? Yes. Is this a legitimate reason to cheat on taxes? No.

The situation does remind me of an incident, just about the time some of these scandals were hitting the press. While getting a haircut, early one morning, a colleague of my barber walked by, and turning to us, being friendly, asked how I was. Wanting to bring some humor to the early hour, my comment was simply that I was happy to be getting a haircut and not be in jail. With a sheepish nod, followed by a smile, I laughed. However, what happened next was jarring. Her exact words, which still send a chill up my spine, were: "Well, if you were a big-time executive, you would never have to go to jail." She said a lot in a few words. Whether accurate or not, she captured the feelings of all too many in our culture. Such perceptions do not restore confidence and trust in leadership, in any way, and will not generate commitment to the common good, in business or for our society as a whole.

Integrity will not allow us to give up. As citizens of this nation, we have a number of important responsibilities. One of those duties is to contribute to the well-being of the society by being productive and shouldering the financial load for the liberties we enjoy. Freedom is not free and neither are the roadways we utilize to get to and from work. Police and fire services for our families and loved ones also come at a price. So too there are costs associated with protecting our citizens from invaders, whether as warring armies and navies or brutal terrorists who do not distinguish in their murders between members of the military or innocent civilians. Fresh water, clean air, safe transportation, edible foods, plus a whole variety of programs and services are provided to our citizens (perfectly or imperfectly) because our society expects nothing less. Each comes with a price. We are responsible for paying for these services. Taxation is the system our government has adopted to pay for the benefits it provides.

Is everyone paying their fair share? Others determine the right answer in this area. What we do know is that everyone is responsible to help sustain the nation, the state, the municipality and the community in which they live. Does everyone shoulder the load appropriately? The answer is probably not. Integrity-centered citizenship suggests that we make our opinions known, work hard to elect those who share our values and support the will of the majority. Cutting corners is not simply or solely about taxes so much as it is a reminder of the need for integrity-centered citizenship, economic stewardship and social responsibility. How we support the system (federal, state and local) sends signals that will influence the attitudes of our children and the grandchildren of our grandchildren. They learn from our choices and our behaviors what we have determined is important. Two fundamental integrity questions to be asked regarding the legacy we are leaving for present and future generations are these:

1. What are we teaching by what we are repudiating?
2. What are we valuing by what we are tolerating?

Question: (E-076)
published in Jim Bracher's Integrity Matters newspaper column on December 3, 2003

"Restoring trust can take years"

Dear Jim:

Seems everywhere there are integrity issues: politics, business, education, organized religion and even in the family structure itself. Where does one look to restore integrity and trust? The mutual fund scandal is over the top. Where does it end? What can be done? Do you have any recommendations for where to turn in these turbulent times?

First, I do not know what to tell you about mutual funds. But, I do know where to turn in these turbulent times. Yes. The right places to turn for answers regarding restoring confidence and trust are to the very same institutions you mention as sources of problems. There is little doubt that most individuals are doing a good job, in government service, free enterprise, teaching, spiritual leadership and parenting. Yet, there are those who take advantage of the system and abuse their privileges. They must be rooted out, wherever they bring harm and abuse. Despite protests to the contrary, given human nature and its seemingly insatiable appetite for the sensational, we know that it is the dramatic reporting of bad news that sells newspapers and attracts viewers for television and listeners for radio.

If one listens to or reads only headline grabbing reports, it is understandable that one's perspective could become negative and even callous. An "everything in the world is awful" attitude might gain some serious mindshare. However, oversimplification is not the answer. Although the media are a convenient target to bash and blame, when they write and report with shocking stories, still it is a large portion of the population that cannot wait to gobble up information about the problems and the calamities of others.

However, it is our First Amendment institutions (free press organizations), including their news teams, that own the responsibility for monitoring all of us – wherever we flourish, whether effectively or destructively. We know that trust has been broken and that confidence has been shattered for millions of investors, customers, religious believers, and the voting public. Fortunately, because of our free press, we have fortunate to have learned about many of these disturbing and sometimes illegal activities. Some of those individuals and institutions being dragged through the headlines may very well be guilty of compromising our culture, our society and even our value systems. How fortunate we are to live in a democracy in which courageous reporters accept the responsibility to blow the whistle on behaviors that are inappropriate. Restoring trust is a key.

Secretary of State, Colin Powell, in a recent editorial (11-10-03) suggests that "trust – once broken – is hard to restore, harder even than restarting an economy." General Powell's comments refer to Iraq and the multiple challenges its people must address. He states: "We must remember that the nightmare that Saddam Hussein inflicted on Iraq lasted longer than Joseph Stalin's tyranny in the Soviet Union. To expect the tragedy of Iraq's past to recede swiftly is unrealistic. Wounds take time to heal, and even when the physical scars disappear, often time psychological ones remain." The insight and sensitivity of Secretary Powell can be applied in other areas as well, perhaps nowhere more dramatically than with the recent mutual funds scandals.

Piggy-backing on Mr. Powell's "trust-restoring" comments, and what actions are most difficult to execute, think about how the Boston-based Putnam Investment fund responded to recent allegations. Seems that two senior investment managers at Putnam were charged with using improper trades to profit personally from mutual funds they oversaw. Putnam denied any wrongdoing but confirmed that four money managers had been fired. This scandal has tarred the reputation of mutual funds, traditionally viewed as safe and conservative. Will the recent crack down on mutual funds scare off some of the 90 million people who have invested in them? When might their confidence be restored?

William Donaldson, head of the Securities and Exchange Commission, understands how fragile trust can be when he addresses longer-term implications resulting from the recent wrongdoings of the mutual fund industry. Mr. Donaldson knows that until trust is restored and abuses are stopped, that all too many innocent investors will lack investment confidence. He promises to overhaul the mutual fund industry, restraining abusive trading, clarifying conflicts of interest and demanding better disclosure of fees. One writer described his criticism of Wall Street as a rebuke. He mentioned in a speech that "the securities industry has found itself stuck in a legal and ethical quagmire, but I am confident that the industry will work together to pull the industry out of the muck and live up to a higher ethical standard." He went on to say that "You can be sure that if you don't, those of us in the government will." Mr. Donaldson knows that some of those working in financial services represent a fundamental betrayal of our nation's investors and are symptomatic of a disease that has afflicted far too many in the industry.

Over and over, we remind our Integrity Matters readers: "It should be common knowledge that free markets must regulate themselves [including those working in mutual funds] or governments will." Donaldson's speech comes in the midst of growing pressure from both Capitol Hill and state regulators for the Securities and Exchange Commission to take more aggressive steps at combating corruption in the mutual funds industry. Once again, the solution to the investment scandals lies in the hands of those equipped and committed to making the system better: solid, ethical, upright and honest suppliers of investment advice; the media who will monitor changes, and the oversight committees and commissions which we fund through taxes and associations charged with regulatory tasks.

One of my advisors is always ready with the same counsel: "Be a little more patient, because the system will right itself, even if it requires a few strong reminders that it is supposed to right itself." Whatever the institution, it will return to some semblance of self-regulation or society will rise up and direct it "rebalance" - because that is how the world really operates.

Question: (E-077)
published in Jim Bracher's Integrity Matters newspaper column on November 12, 2003

"Integrity in workplace never takes day off, even if the boss calls in sick"

Dear Jim:

You write about owners and bosses and how the leaders in various organizations need to clean up their acts. But what do you think about employees who don't pull their weight when the boss is absent? What is the integrity when workers talk on the phone in a retail store instead of greeting customers? What about employees who come in late, leave early, are not very nice to customers and fellow employees, and still expect to be paid for a full day's work? Isn't integrity a two-way street?

Integrity is a two-way street. Employers owe to those with whom they work an opportunity to be productive, successful, safe, healthy and proud. Owners and operators of enterprises are responsible for creating and supporting a working environment that is sustainable for all stakeholders (investors, customers, suppliers, employees, members of the community). Fly-by-night enterprises, because they do not provide long-term viability, seldom become good corporate citizens. So, when employees find legitimate organizations (whether for profit or not-for-profit) to serve, then 100% commitment and follow-through ought to be the expected response. Common sense teaches that when the enterprise meets or exceeds its responsibilities for integrity to its stakeholders, then those who join the organization have obligations as well.

Perhaps this short list of integrity-centered responsibilities will serve our readers well, whether as employees or managers:

1. Honesty means more than simply telling the truth. It means being on time, alert and ready to work, every time. Honest employees never take from the workplace materials and supplies intended for the execution of organizational duties (paper, pencils, paper goods, food, etc). Honesty requires being willing to give appropriate attention to customers and clients, support to colleagues and gracious responses to suppliers. When non-essential personal phone calls become abusive, to the extent that they draw attention away from customer and client services, employee behavior comes into question. Wasting an organization's money while spending time with idle chit-chat, playing video-games, visiting questionable websites during work hours is not being honest.
2. Competency describes a level of performance that satisfies customer expectations and helps to sustain the quality standards of the organization. Competence applies to more than the mechanical functions of any given job; it also refers to the social skills required for effective interactions with all who are impacted by the work and worker. Competent employees pursue excellence and accept the challenge for continuous improvement. Competent employees improve their own productivity and assist with the efficiency and effectiveness of those with whom they work.
3. Loyalty is reflected in how employees refer to and treat their working environment. Those who understand the importance of workplace commitment often do far better than the complainers, whose lives are filled with stories of bitterness and frustration. Work is not play. Work, a combination of perspiration, dedication, sacrifice and focus, is how many must spend a significant portion of their lives to pay their bills and build some level of economic security for the future. Those who are the wisest have learned and are able to live the wisdom articulated by Mr. Elbert Hubbard, nearly 100 years ago:

"If you work for other people, in heaven's name work for them, speak well of them and stand by the institution they represent. Remember, an ounce of loyalty is worth a pound of cleverness. If you must growl, condemn, and eternally find fault, then resign your position and when you are on the outside, blast them to your heart's content. However, as long as you are a part of the institution, do not condemn it. For, if you do, the first high wind that comes along will blow you away, and probably you will never know why."

Integrity is a two-way street. Employers owe the employee and the employee owes the employer. When they meet and exceed one another's needs, productivity rises, customers are happier and profits allow for better rewards for all who are involved. Not only does integrity matter, it makes for an environment that generates economic success.

Question: (E-078)
published in Jim Bracher's Integrity Matters newspaper column on January 7, 2004

"When it comes right down to it, it's greed"

Dear Jim:

Does getting rich make people lose their integrity? The stories about very rich people pushing for even more, in questionable ways like defrauding even small investors, upset me. How much is enough? What happens to integrity and honesty when money comes into the picture?

Money and power have corrupted lots of people. History books and literature are filled with stories about the downfall of the haughty and mighty. Some of the stories are tragic. Other stories about failures are simply pathetic. For some, at least so it seems, wealth and recognition blind their social sensitivity. Simple, hard working, single-minded individuals, who have been helped along the pathway to incredible success, turn a deaf ear to those they once called friends and colleagues. So, what causes this behavior? Either they never learned to appreciate their success and stop clawing their way to the top, or they have failed to recognize how inappropriate it is for them to continue in their self-serving ways, once they have really made it. What we do understand is that this type of behavior is destructive.

Our society seems to enjoy the worship of materialism. Once upon a time, when citizens were not quite so wealthy, so surrounded by conveniences and less able to push buttons that "do the work" – there may have been more energy focused on the quality of social interactions. Perhaps when a trip of 100 miles required a week of travel folks had more time to appreciate their world and the people in it. Now, we are able to fly around the earth in less than a week and still, we seem to have less time to reflect and relate. Maybe this speed of living is partially to blame for our rudeness and lack of civility.

Although we will not change some of the dirty rotten scoundrels who will forever take advantage of others, there is a chance that some who might be at risk of false pride, hubris, and ruthless insensitivity will take heed of another of the lessons taught by Mahatma Ghandi. It was Ghandi, the "great soul," who led the drive for Indian independence and was assassinated in 1948. He gave up his family legacy of a life of guaranteed luxury, including the best that education could offer, to provide guidance for his own people and his nation's freedom. From Ghandi's experiences, we can learn this:

There are seven aspects of living that must be avoided. By choosing more constructive priorities and behaviors, each individual can avoid what Ghandi referred to as the seven deadly social sins:

1. wealth without work
2. pleasure with conscience
3. knowledge without character
4. commerce without morality
5. science without humanity
6. worship without sacrifice
7. politics without principle

Many individuals in every community are not blinded by wealth and power. They support charities, help those who are unable to help themselves. Good people are all around us, reaching out, remembering appreciatively those who helped them and eager to leave a legacy of social improvement. Occasionally, when someone honks a horn prematurely, steps in front of me when approaching an elevator or interrupts before I am able to complete a point, I offer a silent thought of appreciation that they are neither my spouse, best friend nor business partner. Someone else gets to deal with them all the time and I have the pleasure of enjoying others who are working with me to avoid Ghandi's seven social sins. Integrity matters, all the time.

Question: (E-079)
published in Jim Bracher's Integrity Matters newspaper column on November 26, 2003

"Future depends on education of young people"

Dear Jim:

What are the educators thinking about? High school exit exams are now being changed again to be made easier. This makes no sense to me. As the global economy heats up and competition increases, how can we expect the next generation of young Californians to be competitive, let alone succeed, if the educational system here in our state does not insist on ever increasing levels of academic excellence? Are those who soften these important performance standards simply weak-kneed educators who are unwilling or unable to maintain top-quality education? Where is their integrity if they are bowing to pressure from lazy students and irresponsible parents that the standards are too high?

Educational testing is a sophisticated discipline that combines what is being learned with how it is communicated by the student in a formal testing situation. Recent reports overseen by the independent National Assessment Governing Board and the U.S. Department of Education indicate California students are improving on certain national tests. Even though California's performance is not yet stellar, State Superintendent of Public Instruction Jack O'Connell said he "continues to believe our state standard tests are a more accurate reflection of our children's progress in the classroom." Superintendent O'Connell mentions California has unique challenges, including the largest percentage of non-native English-speakers in any state.

Even so, the world economy will not slow down or change its demands to accommodate the educational challenges faced by Californians. The facts are clear.

  1. Competitive advantage is almost always on the side of those who are prepared intellectually and practically to increase productivity. When those in authority do not direct younger people to both understand and commit to the essential sacrifices necessary to remain competitive, then they have lost the moral authority to lead. The future is in jeopardy for those who are not prepared.
  2. Language and math knowledge combined with social and communications skills, are the foundations for effectiveness in the technology-driven world of the 21st Century. Our educators and parents carry an important burden: the responsibility to motivate and sustain serious interest in life-long learning, which begins formally with those earliest encounters in the classroom.
  3. Strong family and community support systems must encourage learning. Regardless of history, culture or economic position, all who are responsibly guiding the next generation become (by choice or chance) the pillars upon which the next generation rests as it makes its way toward strong and productive citizenship.
  4. Role models, in all walks of life, for better or worse, send signals to the next generation about what is important, and how time, energy and money should be invested. When adults are perceived to focus way too much on greed, easy money, superficial activities and violent entertainment – what are younger people most likely to value? Education and learning are often most effective with parents and adult encouragement, which suggests that the most productive homework environment is probably the one that offers quiet and reassurance – with a caring and concerned adult nearby.
  5. Educators are willing to push for ever-higher standards. Once the schools know that they have been endorsed by the student's support system (parents and family), then the confidence of the teachers grow and they are aware that the demands for study and preparation will be met – on the home front – with acceptance, encouragement and enthusiasm.

The rest of the world does not much concern itself with our social and cultural assimilation challenges. At the end of the day, everyone is measured on productivity. If we are casual in our approach to preparation for the future, even the present, we will be left behind: economically, culturally and politically. Again, if we do not regulate and in this instance, demand, the best of what we are capable, then the world as we have known it will change and leave us behind. And, a good portion of the challenge lies with our commitment to help the next generation learn and prepare itself for the future.

Question: (E-080)
published in Jim Bracher's Integrity Matters newspaper column on December 10, 2003

"Integrity in amateur sports goes beyond winning"

Dear Jim:

The University of Southern California (USC) has been shafted...again! The nation's coaches and sportswriters, who should know about these things, ranked the USC Trojans as uncontested national football champion at season's end, but still, this misguided Bowl Championship Series (BCS) computer thing has screwed it all up. In fact, this new BCS, that was supposed to end season-end controversy, might not even yield a clear-cut national champion! This is because USC won't even be in the so-called title game on January 4--yet, if USC defeats Michigan on January 1, they are almost certainly the best team. Oklahoma University (OU) (not ranked # 1) and Louisiana State University ((LSU) (also not ranked # 1 ) will now compete for the title of "BCS champion" which was supposed to guarantee a number one ranking--are they kidding?

How does this relate in any way to integrity? There are dollars, scholarships, pro-football draft positions as well as coaches' jobs at stake here. Computers don't have judgment--how can something this important be compromised by bureaucrats and computer match-ups?

A disgruntled USC fan

Personally, one of the pleasures for me over the holidays surrounding the end of one year and the beginning of the next is the relaxing times of watching and attending sports events. How great that the bowl games coincide with time to slow down for those of us who are the fans.

The BCS process itself appears to be flawed. Beyond that, you might want to give some thought to your own answers to a few questions fundamental to your inquiry:

  1. What is the primary purpose of education, specifically higher education? Within that, what is the role of the sports program in the first place? Was it to teach the importance of physical health, honest competition, teamwork, sportsmanship and leadership? How, then, does the focus and frenzy devoted to the crowning of a national champion strengthen the capacity our nation's younger people to function effectively in an increasingly complex and competitive marketplace?
  2. How much time should young and gifted student athletes, amateurs of about 18-22 years of age, be expected to devote to sports travel, practice and performance activities? And how does that compare with the time that should be devoted to studying for the academic degree they have committed to earn (which most of them will need to earn a living for the rest of their lives)?
  3. How appropriate is it for these young people to be required to keep this intense pressure on themselves beyond the regular sports season; and for these young people to receive performance pressure from parents, friends and coaches from middle school years onward? Remember, only a tiny fraction of those participating will have sufficient ability and desire to succeed as a professional in their sport, and even those will average less than five years as professionals. A retired university basketball coach, Mr. John Thompson, formerly of Georgetown University, once reminded young people that there was a higher probability that an African-American growing up in Harlem would become a brain surgeon than "make it" as a starter in the National Basketball Association. Coach Thompson encouraged young people to not ignore learning in the classroom.
  4. Might this national frenzy with "crowning the champion" simply extend pressure on them that might contribute negatively to their life-long effectiveness, especially if means sacrificing life-long learning for the sake of short-term glory? Many of these amateurs have accepted financial assistance and the management of their personal affairs. As a result, this competitive process may cause them to feel that they have little control over the wishes and demands of others: fans, alumni, sports agents and fund raisers.
  5. Sports programs, at many institutions of higher learning, are big business. How much time and pressure should student athletes need to accept in order to satisfy the desires of those who are too often using them for financial gain?

Some of the notable universities publicize and otherwise celebrate their Olympic medalists and their athletic heroes and Heisman Trophy winners, in an effort to attract other student-athletes of world-class capability. Even though millions and millions of dollars may be attracted to these sports programs and their respective schools of higher learning, these "amateur contracts/awards" may or may not have very much to do with the classroom education. Even so, these young athletes are required to perform, often in front of large audiences, for their respective institutions, essentially for free (minus their "educational costs"). Their competitive success in sports brings both fame and dollars, first to the schools and eventually to a small percentage of the athletes themselves as they enter professional sports.

However, might it be appropriate to think of this time of year a little less about crowning and more about celebrating? Integrity in amateur sport is not as much about
winning as about education, nurture and relationships. There needs to be a more thoughtful assessment of what we are leaving as our legacy of values for and with these athletes. Amateur sports need to be guided by adults who understand what it means to maintain a sense of proportion. Amateur sports, if not properly guided, will continue to provide a forum for angry and frustrated parents (and fans) who scream at coaches, fight one another in front of their children, and set unrealistic expectations. We are better than that.