Oswald Letter

Symbolism and the C-Suite: Damned If You Do, Damned If You Don’t

For the last decade, big companies and the people who run them have been some of the most despised and least trusted in America. In the 80s and 90s, “greed was good” as everyone benefited from a skyrocketing stock market. No one much cared what was going on in those big companies as long as the market was rising and so was everyone’s 401(k) right along with it.

But with the bursting of the tech stock market bubble, everyone’s retirement savings took a hit. That was followed quickly by the very public financial collapse of Enron where thousands of employees lost all of their retirement money because of the fraudulent activities of a few senior executives. Then in very quick succession we had the debacles at Tyco, Adelphia, and HealthSouth. The public’s trust in big business and those who run them was gone. And now the failure and the bailouts of some of this country’s largest institutions have been like throwing salt in an open wound.

So where does that leave the average big-company CEO? I’d say, between a rock and a hard place.

Corporate executives everywhere are facing the most difficult business environment of their careers. The country is in a recession, unemployment is at levels not seen since the Great Depression, and consumer confidence is in the toilet. It’s certainly not the go-go days of the ’90s.

Every move the CEO makes is under the microscope, and they must realize it. When the CEOs of the big three automakers traveled to Washington to testify before Congress and ask for a bailout, they flew into town in corporate jets and got summarily pounded for it. When the AIG executives went forward with a company retreat despite being the recipient of a huge government bailout, they were skewered. Even President Obama has been criticized for his date night in New York, sightseeing in Paris, and golf outings while the country is enduring a financial crisis.

So what’s appropriate behavior for an executive during these unprecedented times? One could easily argue that flying coach to DC would have been a smart PR move for the auto executives. And had they flown a commercial airline it might have pacified some, but based on what those executives are paid and the extra time it would take to make the trip on a commercial flight, it may have actually cost the company and its shareholders more money. The AIG retreat looked terrible. But had it been canceled and the company had paid what may have been tens or hundreds of thousands of dollars in penalties to escape hotel contracts and cancel travel plans, they would have been skewered for that, too. There’s always two sides to a story — the question is, is the other side of the story being heard?

So, I ask you, is the typical big-company CEO between a rock and a hard place?

I’m not defending these decisions, but merely pointing out that many large-company executives are in a “damned if you do and damned if you don’t” situation.  Take a pay cut and the move is seen as being purely symbolic. In fact, AIG’s CEO is working for a salary of $1, and that hasn’t made him exempt from public criticism. Cut company travel and the CEO gets criticized for not being in touch with employees in remote locations.

So what’s my unsolicited advice for the Fortune 500 CEO?

Do what’s best for your company, its employees, and its shareholders. What someone on the outside wants to write or say is irrelevant. Just figure it comes with the territory. For some, doing the right thing might mean taking a reality check, and for others it will be more of what they’ve always done. Trying to win the approval of the public, the politicians, or the media is a losing proposition.

And what about gestures that are so readily dismissed by the media as being purely symbolic?

I’d argue that symbolic gestures do matter. People — especially employees — are watching, and there are times that a symbolic gesture is important. Don’t avoid making one just because some people won’t appreciate it. Others will.