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- Innovation and the Value of Privacy
- Growth for Entrepreneurs
- Can My Company Change?
- Business and Politics
- Small Worlds of Governance
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- Governance and Compensation
- The Quantitative Revolution
- Inclusive Leadership
- Preventing the Next Crisis
- Universities and Women
- The Benjamin Botwinick Prizes in Business Ethics
- The Paul M. Montrone Seminar Series on Ethics
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Leo Hindery thrives on speed and success—unwinding by racing cars and describing his work in the media industry as “down time.” It’s all relative for someone who has spent his career leading companies including InterMedia Partners (currently Chairman), AT&T Broadband, Tele-Communications, Inc. (TCI), GlobalCenter Inc., and the YES Network.
Leo Hindery Jr.
After writing his first book on the deal-side of the media industry, Hindery watched in disbelief as misbehavior persisted at the managing levels of corporations at the onset of the new millennium with its flurry of notorious corporate scandals. The wake-up calls that had shocked the world and Spitzer’s resulting crusade had not managed to phase a subset of business leaders. The scandal blizzard blazed on—with Adelphia, AIG and other corporate frauds breaking soon after the outing of Enron. Mystifyingly, management compensation practices continued to soar to gluttonous levels, with average CEO compensation reported to be 304 times the average company employee in 2004. “What’s going on here?” Hindery asked a room of Columbia Business School students at the Sanford C. Bernstein Center’s Klion Forum event on November 29. “I don’t know exactly what the [appropriate compensation] number is, but I do know that 304 times just can’t be right.”
Do you have what it takes to be a successful, responsible corporate leader in today’s world? Hindery’s checklist of what it takes to be a great CEO includes:
- 1. Stay humbled by never under-estimating the serendipity of your career.
2. Maintain a sense of fairness and fair play.
3. Live your life with grace. In this role you are not just a CEO.
4. Understand the consequences of actions fully.
5. Love people because people will be your job. Otherwise, be a technician.
6. Despise bigotry and tolerate it under no conditions.
7. Make decisions quickly and avoid “pondering”—a lot is hinging on the timing of the calls you make.
8. Be courageous, take smart risks.
9. Be a person of conviction and actually act on them.
10. Be willing to tolerate loneliness. “If you’re a CEO and you’re not lonely, then you don’t understand the gravity of your task. Leading a corporation is an enormous position of responsibility, forcing you to remove yourself in an abstract way because your work forces you to deal with people’s [your employees’] lives.”
It was time for Hindery to speak out and he did so with his second book, It Takes a CEO: It’s Time to Lead with Integrity, calling on all CEOs to step up to the plate and assume their intrinsic responsibility to be part of the solution to the problem. Hindery notes that the path to principled, responsible leadership begins on day one of the business school experience. “All of you aspire to be managers—and some of you will be blessed enough to be CEOs,” said Hindery. “Think about why you’re here at business school.” While a sense of career drives today’s MBA students, Hindery insists that real focus must be placed on growing into a superior manager every step of the way.
The need for superior management has never been greater in Hindery’s view. In 1982, a Business Roundtable including the world’s most prominent executives resulted in a historic milestone—an acknowledgement that CEOs have multiple constituencies and responsibilities beyond shareholders alone, that managers were not a class apart but members of the greater employee base, and that corporations had responsibility to the nation as a whole. But a funny thing happened in the following two decades. When the Business Roundtable reconvened in 2004, the tone took a marked shift—shareholders were cited as the primary constituency and there was discussion of a distinct “management class,” a departure from the “crisp, honest sense” of broader responsibility beyond the bottom line.
Why had beliefs in corporations serving a role for the greater good deteriorated? Hindery suggests that four institutions failed us, facilitating the breakdown: First, Boards of Directors, who began to veer away from their role as forthright stewards, embodied by Enron’s Board “gone amuck”; second, auditing firms; third, the legal community in supporting role of auditing; and finally, the financial press. During the bull market of the 1970s, the press shied away from critiquing companies and the tradition continued in the 1980s onwards with little scrutiny and censure of blatant corporate wrongdoings.
Hindery’s mantra is not an idealistic one. “I am a capitalist,” he explains. “Powerful financial outcomes are possible while embracing multiple constituencies.” Hindery claims that It Takes a CEO is an impetus for corporate leaders—present and future—to reflect. It is for people like CBS students who are making conscious decisions to be managers and must at all costs re-embrace the notion of accountability and service to multiple constituencies. Otherwise, “left unchecked, U.S. industry will offshore everything but consumption… it will pollute right to the edge of law, destroying the middle class and leaving no vibrant legacy behind for the next generation.”