Your Reputation

But in 2006, allegations that McGuire had backdated his stock options and that the backdating hadn’t been properly accounted for became public. He resigned in October, and agreed to re-price his stock options to eliminate any gain from backdating. The Securities and Exchange Commission has since launched a formal inquiry into the matter. At the time of this writing, it is unresolved. However, McGuire’s once stellar reputation has been tarnished forever. That’s a terrible fate for a man who had an incredible career and was on his way to leaving a wonderful legacy.

Your Face = the Company’s Face

Fortunately for UnitedHealth, the scandal has not ruined the company. That’s not always the case, however, as illustrated in the Arthur Andersen debacle, where the world’s premier professional services firm was destroyed by the poor judgement of one partner.

People in positions of business leadership must realize that when they accept the keys to the corner office, it is a privilege that implies certain responsibilities. Operating a profitable company that is responsive to customers, employees, and other stakeholders is the obvious stuff. What I’m talking about are personal behaviors that reflect the highest moral standards in all areas of your life.

Your image, behavior, and reputation are inextricably linked to the reputation of the company you lead. Business leaders set the tone for company culture and values, and define the company’s vision and strategic direction. Your face is the company’s human face.

Think about Bill Gates and you envision the face of Microsoft. Think about Jack Welch and you envision GE. Conversely, think about William McGuire or Bernie Ebbers. The latter two were the crème de la crème until they made one egregious error in judgment that brought their reputations crashing down, tarnishing their company’s image.

See what I mean? The mug that looks back at you from the mirror every morning is your company’s public image. That should make you straighten your shoulders!

Unchecked Egos

Who is to blame when a company’s reputation is blemished? Some blame goes to the leader for his or her behavior. The company’s board of directors must act as a parent teaching a child to accept responsibility for his or her actions.

However, the blame game shouldn’t stop there. Too few boards of directors have the discipline to accept responsibility for the system that American business has created. I’m talking about the system that rewards aggressive, arrogant behavior. If you want to climb the corporate ladder all the way to the corner office, you need to develop certain personality traits to get there. People with big egos, who believe that rules don’t apply to them, are generally the ones who make it to the top. When they get to the top, they behave as if laws and accepted ethical rules don’t apply to them. It’s the responsibility of board members to make sure their company has good corporate governance and corporate values, and to enforce those laws and rules.

Board members need to protect the company’s physical assets, but they also have a responsibility to protect the intangible assets, including the company’s good name. After all, Ole taught us a lifetime of good deeds can be wiped out overnight by one selfish act of greed or pleasure.