More Than Work: CEO lies, secrets bring doom, gloom to companies

Tim McGuire is a past president of the American Society of Newspaper Editors and former editor of the Minneapolis Star Tribune. He writes about workplace issues.

American Airlines CEO Donald Carty resigned April 25 under incredible pressure because his unions felt betrayed by a secret deal Carty made to enhance the pensions and retention bonuses of several top American executives.

The unions were outraged because Carty, in the name of avoiding bankruptcy, demanded huge givebacks from the unions at the same time he was keeping the extra goodies for executives a secret.

The American Airlines fiasco offers a wonderful opportunity to review some of the issues of spirituality, ethics and values in the workplace.

Against a backdrop of an increasing gap between CEO salaries and rank-and-file wages, Carty decided to raise executives' pay while cutting the pay of his workers. This was despite the fact that his crack executive team led the company to a staggering loss this year.

Carty's action does not recognize a principle I've talked about before: the priority of labor over capital. Human beings are more important than the capital considerations that obsessed Carty.

Inevitably, some top executives will read this and cluck that I just don't understand the realities of American business.

Frank Parisi, general manager of Fleishman-Hillard public relations in Minneapolis, understands. When business went south last year to the tune of 15 percent, Frank thought long and hard about laying off employees. He didn't. Instead he and his senior managers took pay cuts.

Frank thought a little management suffering was better than layoffs. He valued his people. Business has since picked up and, this year, Frank's now looking for additional staff. Doing the just and fair thing can also be the right thing for business.

In a previous column I talked about openness versus secrecy in the workplace. Carty and his executives are the poster children for the insidiousness of secrecy. They obviously knew their actions weren't going to pass the smell test, because they tried to keep their actions secret by delaying their SEC filing until after the unions had voted on the deal.

The minute they did that, the bells should have rung. If you feel compelled to keep something secret, assume it's wrong and start asking the tough questions. The presumption should be that all important decisions must be open. If they can't be, somebody better ask why.

And that leads to another important question: Where were the whistleblowers and the work prophets? Was the environment at American that incredibly unfriendly to dissent?

I continue to be told by close watchers of the business community that despite the horrible scandals and miscues of the last two years, most CEOs still are smugly confident that nothing like Enron, Worldcom or the American fiasco can happen to them.

Those CEOs are wrong. If companies don't start paying more attention to basic ethical values such as justice, fairness, the importance of human beings, openness and the importance of dissent, there is no end in sight to corporate scandal.

Tip for your search

Executives, managers and supervisors should conduct an audit of the workplace. Ask these questions: Are people feeling valued? Are people being fairly compensated for their contributions? Do people feel free to report improper behavior or clear management screw-ups? If the answers are not an unqualified "yes," there's work to do.