Corporate Ethics
July 9, 2009
I do not subscribe to the notion that corporate ethics have been changed by recent developments. While there is greater sensitivity, the fact of the matter is that good lawyers have always advised their clients to do the right thing. It is unfortunate when lawyers forget their role: Being a good lawyer is advising your clients to do the right thing. In my experience, boards of directors and management want to do the right thing. There is a perspective that the world is filled with evil executives who want to abuse the system at every turn. I just don’t believe in this view of the world. I believe that, fundamentally, the vast majority – meaning 99 percent – of all executives out there are trying to do the right thing every day. Unfortunately, our views have been colored most recently by the 1 percent that seems to not put doing the right thing as a priority, or they misperceive what the right thing is and seem to attempt to justify it in their own minds. When the rest of us look at the situation, it is very clear that this is not the right approach.
The first rule of thumb should be remembering the shareholders when you are advising a board of directors and management. Their primary goal is to create value for shareholders, and you should always keep that in mind in terms of the advice you give senior managers and board of directors. Sometimes individual interests will cloud some of that decision-making. You have to keep your eye on the ball.
You want to believe that people are fundamentally honest. I guess what you learn if you practice long enough is that not everybody is honest. You have to keep your antenna up to the possibility that there may be some individuals out there who are not honest and candid, and that makes it difficult to do your job. If people are not being honest and candid with you, you can’t give them good advice and potentially you just can’t do a good job. I feel that people are fundamentally honest, but you certainly have to be aware when dishonesty arises and you have to address it. You, as a lawyer, must do the right thing. You must do the right thing no matter what the economic impact.