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The Post’s Pearlstein says Wall Street execs should apologize - but will they?
By Lauren | September 25, 2008
Washington Post columnist Steven Pearlstein warmed my heart yesterday when he made a compelling case for why the Wall Street executives who brought the current financial crisis crashing down around us all should stand before the cameras together in the rotunda of the Capitol and say two words to the American people: “We’re sorry.” As Pearlstein correctly observed, our financial system runs on trust, and the folks who ran our capital markets into the ground abused that trust by putting their own financial interests ahead of those of their customers and the American public. How refreshing would it be to see the CEOs who created this mess stand up together and apologize for the damage they’ve done?
Short answer: it would be a huge breath of fresh air, but don’t look for it any time soon.
One of the reasons that American CEOs don’t often apologize may be that our legal system can make such apologies perilous. We haven’t yet heard much about the criminal prosecutions and shareholder suits that will come out of this financial crisis, but you can be sure that both are coming. As Pearlstein acknowledged, corporate apologies can become “dangerous ammunition in the hands of prosecutors and plaintiffs lawyers.” While an effective apology can often turn aside the threat of litigation, corporate executives may be reluctant to risk taking responsibility for their errors when the stakes are this high.
No one could reasonably argue that the Wall Street execs who created this disaster should get off without being held accountable for their enormous greed and lousy judgment. At the same time, it seems a shame that the threat of litigation looms so large that it may prevent the American people from receiving the heartfelt apology they deserve. Congress is looking carefully at how to re-regulate the investment industry to prevent future train wrecks like the one we’ve just seen. Maybe it’s also time for the courts to re-examine the rules and precedents that can make an honest, straightforward apology the lynchpin of a lawsuit.
To read Pearlstein’s op ed, visit http://www.washingtonpost.com/wp-dyn/content/article/2008/09/23/AR2008092303097.html.
Topics: Apologies, Business Ethics, Legal Ethics, Social Ethics, ethics |
September 26th, 2008 at 11:00 am
Absolutely right, Lauren.
It would be unfair if a leader who had the decency to provide a geniune apology should be penalized for this action in court.
One way in which such executives can make an apology is by refusing to accept those huge golden handshakes. Only those who successfully achieve positive outcomes should be rewarded with those types of packages.
Cheers
Andrew
September 26th, 2008 at 1:18 pm
Hi Andrew,
Good, as always, to hear from you! Wouldn’t it be fabulous if the executives voluntarily gave the money back? Oddly enough, though, their lawyers might advise against it, since giving back the money might look like an admission of guilt.
Lauren