The Clueless CEO Defence
That’s the wonderful headline on a lovely USA Today article on the trials of ex-CEOs Bernie Ebbers of WorldCom, Dennis Kozlowski of Tyco International and Richard Scrushy of HealthSouth. “Charismatic, driven and fabulously wealthy, they sat atop giant companies largely of their own making. They didn’t so much manage these corporations as reign over them.
But now that their trials for securities fraud are about to begin, they want to let the world in on a little secret: They actually weren’t very good at what they did. They were unaware of what was going on around them and were incapable of demanding accountability from their aides. Like the hapless Sgt. Schultz in the old television program Hogan’s Heroes, they know nothing, they see nothing.
Call it the invasion of the clueless CEOs. These once high-flying corporate titans have made humiliating swoons in an attempt to avoid being brought down by prosecutors. Ebbers and Scrushy are expected to argue that key aides kept them out of the loop on accounting decisions. Kozlowski, meanwhile, told The New York Times he was unaware of some of the lavish items that went into his New York apartment, including his infamous $6,000 shower curtain.
The problem with these arguments is that they are almost impossible to swallow. When the executives were at the top of their games, they demanded to be treated like geniuses. They made their own rules and enjoyed all the perks of power, wealth and even fame. Scrushy went so far as to create his own entrance into HealthSouth’s lavish Birmingham, Ala., headquarters. Now, they want people (i.e., jurors) to see them as na´ve and ignorant.”
This is very sharp writing — in the tradition of Thorsten Veblen, who is up there somewhere, grinning from ear to ear. Meanwhile I am wondering how you could spend six grand on a shower curtain.