Boeing: Bingo! It146;s Bill again

A question that will be played out in ethics classes at business schools for years to come is whether Boeing, one of the largest government ...

A question that will be played out in ethics classes at business schools for years to come is whether Boeing, one of the largest government contractors, struggling to get out from under an ethics cloud, should have fired its married 68-year-old chief executive for carrying on with one of the company8217;s employees. Perhaps the best line of the week goes to The Wall Street Journal8217;s editorial page, which noted wryly that if something like this had happened at Airbus, the French would have put the fellow up for a bonus.

Funny, but as it turns out, also rather profound. Because it points up two truths about this episode: First, given the political and legal environment in which the company finds itself, and the prevailing business culture in the US, the board probably made the 8216;8216;right8217;8217; decision in demanding Harry Stonecipher8217;s resignation. And, second, it8217;s a ridiculous outcome that leaves nobody better off and raises serious questions about that environment and that business culture.

The board knew full well that Stonecipher and his wife had been living apart. And investigation revealed that the woman did not report to Stonecipher or receive special treatment. Rather, the biggest problem was that Stonecipher and his new friend had exchanged sexually graphic e-mails on the Boeing system, in violation of company policy. And if such e-mails were to come out they could cause embarrassment to the company, and jeopardise relations with government customers uncomfortable about doing business with philanderers.

Once Stonecipher had enunciated such a policy for all Boeing employees, of course it made it impossible for the board to make an exception in the case of the chief executive. But where and when was it decided that companies have to mete out the equivalent of capital punishment for every crime from bribery and fraud to sending X-rated e-mails?

As a matter of evidence, there doesn8217;t seem to be much connection between business judgement and the judgement people bring to affairs of the heart. Many businesses, after all, have been run into the ground by family men. And how do we square Jack Welch8217;s judgements running General Electric with his dumping his second wife for a star-struck journalist?

What8217;s most dangerous, however, is the implicit acknowledgment by the board that it is too risky for a company doing business with the government to be run by someone whose personal life might offend the ayatollahs of the religious right. You would have thought we might have learned a lesson from the disastrous campaign to impeach a president on morals charges, only to ensnare a speaker-designate of the House. Instead, this same puritan standard now seems to have been extended to the corporate sector.

One of the mistakes of the 8217;90s is that we all put too much stock in the magic power of chief executives. Harry Stonecipher now joins the list of those who both benefited from that misplaced importance, and were brought down by it.

LAT-WP