"I live in a tormented state now,
knowing the pain and suffering I
have created," said the disgraced financier Bernard Madoff standing
in the US district court before the judge, Denny Chin, sentenced him to
150 years in prison for perpetrating the biggest and the most brazen
investment fraud in Wall Street history—his decades long Ponzi scheme
bilking thousands of investors out of billions of dollars. Madoff, speaking in a
calm voice, said: "I cannot offer you an excuse for my behavior. How do you
excuse betraying thousands of investors who entrusted me with their life
savings? How do you excuse deceiving 200 employees who spent most
of their working life with me? How do you excuse lying to a brother and
two sons who spent their entire lives helping to build a successful
business? How do you excuse lying to a wife who stood by you for 50 years?"
If only Madoff had been guided by this
value-system—conscientiousness—right from the beginning of
his stewardship of his financial services company, Bernard L Madoff
Investment Securities LLC, that promised steady returns, mostly operating
with an air of exclusivity by not taking all comers, perhaps, to build more
confidence in the minds of his innocent investors, the trauma that his
erstwhile clients are going through today—the trauma that is well described
by Dominic Ambrosino, a retired New York City collections officer:
"How could somebody do this to us? How could this be real? We did
nothing wrong. We will have to sell our home and hope to survive on Social
Security alone"—could have as well been avoided. The `trust' that plays a
vital role in the world of financial services businesses would have then not
`gone out of the window'.
As to the alienation of trust from businesses, the Edelman Trust
Barometer released in January says trust in the US business dropped from 58%
to 38% in a year, that people around the world are today in a rage—indeed,
an intense rage. Society has lost confidence in banks and other financial
services providers. And today's globalized economy obviously cannot
function unless people believe that financial institutions are sound—sound
financially, ethically and morally. No doubt, we, being social animals,
are highly prone to trust each other. Yet, the recent happenings in
financial markets in terms of deceit, greed, and incompetence of institutions that
had defrauded billions of dollars of innocent investors, have hit the
people's trust hard. It is against this backdrop that James O'Toole and Warren
Bennis argue in their HBR (June 2009)
article, that the new metric of corporate leadership would be: "the extent to
which executives create organizations that are economically, ethically, and
socially sustainable." |
