Avoiding Integrity Land Mines by Ben W. Heineman, Jr.

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Avoiding Integrity Land Mines by Ben W. Heineman, Jr.

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As the chief legal officer at GE for nearly 20 years, I was part of the senior management group that sought to fuse high performance with high integrity. No one was more demanding about hitting financial targets than Jack Welch or his successor, Jeff Immelt. But both knew that employees up and down the ranks face the temptation to make the numbers by fudging the accounts, cutting corners, or worse. Unconstrained, these internal pressures—made more intense by corruption in emerging markets, demanding customers, and unscrupulous competitors—can lead to corrupt capitalism.

The changes in laws, regulations, stakeholder expectations, and media scrutiny that have taken place over the past decade can now make a major lapse in integrity catastrophic. Fines, penalties, and settlements are counted in the hundreds of millions (or billions) of dollars, not the millions or tens of millions of a decade ago. And worse, in some cases (as Enron and Arthur Andersen demonstrated)—a company can actually implode.

 

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