Editorial: October 2003
Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
Given the state of the economy and the public's crisis of confidence in the ethics of corporate leaders and the companies they run, it's no surprise that corporate executives are finding themselves increasingly under the gun. Just ask Richard Grasso, the publicity-conscious, thin-skinned former chairman of the New York Stock Exchange: He'd been the subject of a wave of private maneuvering and public outcry as the details of his $140 million pay package emerged, ultimately forcing his resignation last month. Along with the Grasso uproar, some pundits said, went some of the luster of the Big Board as the gold standard of the financial markets.
Blame Grasso's greed for the public scorn, but also credit information technology for enabling some of the scrutiny that fueled his downfall. Grasso's greed stoked the flames of the digital media machine, which for days made the Grasso affair the stuff of blogs, message boards, chat-rooms and e-mail exchanges, especially among investors' rights groups that have sought to watch the watchdog. According to Nell Minow, cofounder and a director of The Corporate Library, an investor-rights group based in Portland, Maine, the Internet didn't simply help to keep the public informed about fat-cat pay packages; the Net's interactive forums helped Minow's group to organize and fuel public outcry over excessive pay. Says Minow, whose father, Newton, famously called television "a vast wasteland" when he chaired the Federal Communications Commission in the early 1960s: "Markets don't run on money. They run on information. Before the Net, there was a disconnect between what was theoretically public and what was actually public. We don't have that gap anymore."
Indeed, the proliferation of speedy data-gathering tools in the hands of customers, partners, suppliers, regulators and consumers is making it harder for corporations and their executives to escape the glare of public scrutiny, giving rise to what author Don Tapscott calls "the naked corporation." "If companies are going to be naked, they'd better be buff," Tapscott says in an interview with Executive Editor Marcia Stepanek. "Firms will have to be who they say they are; you can't make garbage smell like roses anymore."
Our readers would seem to value such a view. In this month's CIO Insight survey of more than 750 IT executives, integrity ranked high on a list of eight personal characteristics deemed most critical for effective IT leadershipbehind the ability to inspire others and vision, but above intelligence, willingness to take risks and creativity and innovation.
In an age of transparency, better, faster, smarter public relations simply won't be good enough. What's required is the integrity to get it right the first time.
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