During Keynote Address Dave Mager mentioned a lot of unethical leaders and gave us his opinion regarding their unethical decisions. One of the leaders he mentioned was Dennis Kozlowski, CEO of Tyco, and I decided to further research his unethical decisions. His case was different because he was not charged with accounting fraud like many other top executives have been charged with in the past.
Kozlowski was found guilty on 22 of 23 counts of grand larceny, conspiracy and violating general business law. Kozlowski and his CFO, Mark Swartz, were accused of taking $120 million bonuses and abusing an employee loan program. More specifically, people were not happy with Kozlowski’s lavish lifestyle at the stockholders expense. He has a $30 million NYC apartment paid for by the company and threw his wife a $2 million birthday party that Tyco paid a portion of. He demonstrated ethical egoism because he acted to create the greatest good for himself. He did maximize profits for Tyco but only because Tyco has a pay-for-performance culture and that would benefit him in the long run. All leaders have an agenda, a series of beliefs, proposals, ideas and values. Clearly, his agenda only concerned himself. Like Dave Mager said when you value money above integrity you will sacrifice anything for your number one value including integrity.
Ethical leaders are concerned about issues of fairness and justice. As a rule, no one should receive special treatment or special consideration except when the situation demands it. Kozlowski proved he was not an ethical leader because he received special treatment himself with all of the luxuries he had the company pay for as well as all of the bonuses he would give himself and his CFO Mark Swartz.
An ethical leader is honest so that others can see them as dependable and reliable. If a leader is dishonest it creates dishonesty in the organization. People lose faith in what they say, stand for and the respect for the leader diminishes. Kozlowski says he has lost most of his friends and his followers. It changed the way people looked at him they could no longer see him as a role model due to his lack of dependability. No one felt they could trust him anymore, including his second wife who has filed for divorce. Kozlowski argues that he did not lie or misrepresent any data, “nothing was hidden”. He says the Jury made an assumption because he was the guy in the room making $100 million and he must have done something wrong. Kozlowski is in prison for a minimum of eight and maximum of 25 years in jail.
Do you think his behavior deserves such a sentence? What unethical behaviors do you think Kozlowski portrayed. Thanks!
http://www.time.com/time/specials/packages/article/0,28804,1903155_1903156_1903152,00.html
Liz Ramirez
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