Leading Edge: The Culture of Candor

A brilliant CEO I know has a plaque prominently displayed on his desk that reads: "In every business there is always someone who knows exactly what is going on. That person should be fired."

The plaque would be funny if this were not the age of WorldCom, Enron and Arthur Andersen, an era in which a worrisome number of leaders seems more concerned with punishing whistle-blowers than cleaning up their acts. I am referring to the case of Sherron S. Watkins, the Enron employee who warned her superiors that "Enron could implode in a wave of accounting scandals." Instead of being rewarded, as she deserved, the energy giant's CFO Andrew S. Fastow tried to fire her.

American business is currently being roiled by as serious a crisis as it has seen in decades. The public's growing conviction that corporate culture is intrinsically rotten is a much graver threat to economic stability than the wrongdoings of any one executive or board of directors, however egregious. The media now demonize many of the same executives who were lionized on glossy magazine covers only a year or two ago, and the finger-pointing has extended to once mostly anonymous boards of trustees, now charged with failing to act in the face of malfeasance.

It is easy to forget, after a long period of prosperity in which star CEOs were almost as glamorous as rock stars, that our attitudes toward business leaders are cyclical. We idolize them out of all proportion to their genuine virtues, only to see their overblown reputations shatter. At that point, we often take perverse pleasure in their falls from grace. How else to explain why Martha Stewart came to be transmogrified into a kind of capitalist goddess, only to be pilloried when she faced an investigation of insider trading? Jokes about stenciling the walls of prison cells abound, a phenomenon that some wag dubbed "Marthafreude."