I literally shuddered listening to Freeh’s comments, “The most powerful men at Penn State failed to take any steps for 14 years to protect the children who Sandusky victimized,” he said. “Messrs. Spanier, Schultz, Paterno and Curley never demonstrated, through actions or words, any concern for the safety and well-being of Sandusky’s victims …”
Being the people at the top, Chair Karen Peetz, Penn State president Rodney Erickson and board member Kenneth Frazier faced 70 reporters, photographers, and TV cameramen in an honorable, but flailing attempt to ensure “an event like this never happens again in our university” and implementing a series of reforms.
And that’s always the caveat, implementing reforms. Our failures to properly regulate, causes tremendous pain. Need examples? Ok, here are a few:
- Bob Diamond of Barclays (BCS) was the latest CEO of an international bank to be hauled before a government body to explain and atone for the sins of employees.
- JPMorgan Chase & Co sacrificed investment chief Ina Drew in response to trading losses reaching $3 billion.
- In 2010, Hewlett-Packard’s CEO Mark Hurd resigned after an investigation found he had an improper personal relationship.
- Ousting of CEO Bill Johnson after one day on the job at an estimated cost of $44 million isn’t going to help.
- Gary Foster, a former vice president of Citigroup’s internal treasury finance unit embezzled $19 million from various accounts Citi accounts and into his personal JPMorgan Chase account. (I hope Ina Drew sucked it dry).
- Rita Crundwell, who handled all of the Dixon, Illinois city finances, embezzled a staggering $30 million in city funds.
- Shawn Thomas Whiting, a former Boy Scout leader from Taylorsville, Utah, has been ordered to spend one to 15 years in prison for child pornography.
- Juan Antonio Rosa, 36, was sentenced to almost 22 years in prison for distributing child pornography to Wendy’s customers with their food.
And if you watched any of the news conferences, the replacements always talk ‘reform.’ In fact they talk so much about reform that the very word now means very little. We as leaders must remember that any control or reform we do … or don’t do … is simply easy news fodder. You will be checked, balanced, measured or critiqued. There are just too many computer software forensic tools to publicly state how fricking stupid you are and claim unaccountability. If you’re the guy at the top, whether good or bad, you’re a public dart board.
When caught in a ‘What the Frick” (otherwise known as WTF) moment, the moral failing is that we care more about reputation and honor than failures and victims. Sadly, it’s within the crossroads of pain and public introspection that convoluted personal value meets humility. And we all suffer greatly.
From the very beginning, all who entered the Penn State mess, auditor and leader alike had to willingly swallow the untenable truth: the very leaders entrusted to fight for the people who couldn’t fight for themselves allowed Sandusky to prowl. As I listened to recaps of Mr. Freeh and the Penn State Trustee news conference I am saddened at all the pain everyone had to endure. For those who suffered by the willingly disregard of human worth, either by prior or current Penn State employees, the pain these leaders suffered is miniscule.
To all leaders, we must remember to protect those to which we are entrusted. We are supposed to fight for all children.
Is it possible to really step back from the entitlement and selfishness? Imagine if we implemented all the proper controls from the beginning?
There would be no ‘reforms’ and a whole lot less pain.
————— Post Script —————
Botched trades by a JPMorgan Chase & Co. (JPM), that Jamie Dimon pushed to boost profit, were masked by weak internal controls and may ultimately saddle the bank with a $7.5 billion loss. During a July 13, 2012 earnings call indicated Dimon brushed off concerns raised by some of his most senior advisers, including heads of JPMorgan’s investment bank, about the lack of transparency and the quality of internal controls in the CIO in past years.
The company also said it would restate its first-quarter earnings because it was no longer confident that the company’s traders had fairly valued positions within the office that handled the controversial trades.
Throughout the call, Mr. Dimon told analysts that the company has strengthened its risks controls to stave off further losses.