Harry Stonecipher was fired recently as Boeing Co.’s chief executive officer not specifically for engaging in a relationship with another employee, but for violating the company’s code of ethics. Because other affairs between consenting adults happen every day inside many companies, and the people involved are rarely fired, Stonecipher’s dismissal raises the question of whether it was justified or necessary. Clearly, it was.
“Chief executive officers, other executives or anyone managing people have to be role models in their companies,” says Marc Lampe, a professor of business ethics at the University of San Diego. “Setting an example for people is one of the things these people have to do.” He says that executives help establish the standards that drive the behavior of other workers. “People look up the chain of command for cues on how they should approach their jobs,” Lampe says. “It comes with the territory that all managers should be mindful of how they conduct themselves because it is going to be reflected in how others act.”
During the past two and a half years, Boeing has wrestled with the fallout from a procurement scandal that tarnished its reputation. A former Pentagon official, Darleen Druyun, pleaded guilty to secretly negotiating a $250,000-a-year executive job with Boeing while overseeing the Pentagon’s negotiation of a $23 billion contract. Druyun admitted inflating the value of that and other contracts for Boeing. She was sentenced to prison, along with the chief financial officer who hired her. The scandal also led to the December 2003 resignation of Phil Condit as Boeing chairman and chief executive.
When Stonecipher’s affair was disclosed in an anonymous letter to company directors, it put the company in an uncomfortable position while it was attempting to put the procurement scandal behind it. Boeing’s code of conduct requires that employees not engage in any activity that would damage its reputation or embarrass it. “If you have a proclaimed value system and your executive leader violates it, you have to do something about it,” says Cynthia Olmstead, president of TrustWorks Group, a leadership and organizational development firm. “If you don’t, it erodes the integrity of the values and leaves them useless.”
She cautions that a “do as I say, not as I do” leadership style is impossible. “Something like this erodes the leader’s credibility,” Olmstead says. “Employees begin to question the company’s ethics and the individual’s personal values. How can you expect them to live up to your stated values if the executive is not held accountable.” She believes executives and managers of companies should be held to higher ethical standards than other employees, but admits that doesn’t happen often enough.
Olmstead’s firm helps companies develop goals that incorporate values and business objectives. When done properly, employees throughout a company see a clear direction, get involved in pursuing goals and develop trust in the company and its mission.