Do C-Suite Execs Play By the Same Rules as Other Workers?
There have been numerous instances over the years in which top-level executives at retail have resigned or been fired in disgrace for violating company rules of one form or another. In some cases, fines and jail time have also been involved.
I bring this up because I was dumbstruck by the admission of former Marsh Supermarkets CEO Don Marsh in court this week that he was unaware of the company’s code of conduct. Mr. Marsh, who is being sued by the company for misusing company funds (in the millions) to pay for personal expenses including those related to extramarital affairs, signed off on the policy in 2005, but did not seem to think he was bound by it. In his defense, Mr. Marsh claimed that he had stacks of paper on his desk on a daily basis and did not have the time to read everything.
Whether he wins or loses the case, Mr. Marsh’s reported testimony is reminiscent of what other executives who have found themselves removed from corner offices have said. They, like he, believed they were justified in engaging in activities that would get others reprimanded, if not fired.
Discussion Questions
Do upper level retail industry executives play by different rules than the workers they lead?
Yes, and it is wrong.
If your position has been appointed by the board of directors, and the board knows of your activity and really doesn’t care, then it’s probably okay — especially in a family controlled company. I’m the CEO of my company, so I get to make the rules.
Our great president Richard Nixon once said, if the president does it, then it’s not against the law. Sometimes violating a code of ethics policy is justified when the boss needs you to work off the grid to obtain competitive intelligence. That’s all about winning and beating your competitor to benefit the greater good of your own company. But, from what I recall, the Marsh family controlled the company and they can make their own rules whether they are written or unwritten. However, if the CEO and board of directors are minority owners, then the majority is being deceived and that is wrong.
History has shown that many retail industry execs believe their employees should follow the ‘doing as I say, not as I do’ rule. Not sure it is a case of playing by different rules, but rather in the interpretation of the rules.
There are always those people who feel “special” and “entitled” and many of them do get to the Senior Executive level. Part of the issue is the kind of packages that industry uses to lure these people, including corporate jets, club memberships, golden parachutes even for failed execs, etc. The danger with the C-level people who disregard the rules and get away with it is the fostering of that behavior at other levels; this can lead to a very dysfunctional workplace.
We all know that this is the case in many other industries as well, however, I do think retail has more issues due to the disparity between the corporate office and the stores. I remember joining a retail organization in a management position and being told, ‘our policy says that you are only entitled to 1 week of vacation your first year because that’s we do for our store employees. We will let you take 4 weeks, just cover that with me.’ Also, employees got a 20% discount but at a certain level of management, 40% was taken off of our store credit cards. Did i think it was wrong at the time? No. That was the way everyone did it. It all starts somewhere.
Lead by example: Act the way you wish your employees to!
Like Max said, “Yes, and it’s wrong.” But, as we all know, CEOs in other industries, in labor unions, in universities, and in Federal and local governments don’t always read vital cables or memos on their desks or even remember the organization’s code of conduct.
The Ethic Intellect is a vagabond when supported by raw power … in all elastic walks of powerful life.
This question seems rather juvenile, in that it implies that there is some “rule book” where every rule applies to every employee equally…like in kindergarten. If a counter person is late to work twice in 3 months they’re let go, so the same should go for the company president? Of course not. (And in exchange, demands are [supposed] to be made upon execs that are not made upon hourly workers.)
The problem, rather, is that some execs seem to feel they don’t have to play by ANY rules. Suffice it to say that if some CEO spends millions—millions!!—on his mistress (whether company money or even his own), he isn’t qualified to be there in the first place…whatever some apologist may claim.
The entire company reports to the CEO. The CEO reports to the Board of Directors. Thus you have two separate bodies and two sets of rules. When you add a generous portion of arrogance as we see in this article, improprieties are highly likely and often committed in broad daylight.
It seems the higher one’s position on the “food chain” the more freedom is allowed to “stretch” the rules. They have the money to hide their misgivings. Nothing new here. It has been happening for years.
Of course they play by different rules. They have to. They report to a board of directors who demand different things from them, which the average worker does not encounter. That is why they are an executive of the company. However, playing by different rules, and making poor ethical and sometimes illegal decisions, are 2 different things.
All employees should be ethically and legally bound to make the best decisions, everyday, regardless of their position. Once you cross this line, you become an example of what not to do in corporate America, not an example to follow!
Culture comes from the top, and power manifests arrogance. But in truth, the vast majority of CEOs play by the golden rules.
Sadly, it’s in vogue to undermine those who have achieved success. Mr. Marsh is not reflective of most retailers or CEOs.