Moskowitz Symposium on Resilient Capitalism
An estimated 70 percent of Americans believe that questionable accounting, illegal CEO compensation and benefits, and insider trading are “widespread American business practices,” former Business Dean B. Joseph White noted in his welcoming remarks at the Louis and Myrtle Moskowitz Symposium on Resilient Capitalism, held Jan. 31 at the Business School.
More than 350 business and community leaders, faculty and students participated in the day-long event designed to provide a high-level perspective on issues of corporate culture, reporting and monitoring and ways to address the crisis of confidence in American business and leaders.
Setting the tone for the day, White observed, “Mania followed by scandal followed by reform is as American as apple pie. The good times will never end, then we’re shocked by wrongdoing, then we have a vigorous debate about whether enacted reform goes far enough, will ruin the nation, or is something in-between. This debate is an essential means by which we as free people help shape the future of something very precious: the most productive economic and business system ever created by human beings, an absolutely necessary though not, by itself, sufficient condition for us to achieve our individual dreams and fulfill our national destiny.”
PANEL ON CORPORATE CULTURE
Explaining his firm’s long-standing commitment to operate in an ethical way, James Hackett, CEO of Steelcase Inc., said businesses must hold on to their core values, through good times and during periods of economic decline. “We see ourselves as stewards of something bigger than ourselves.”
Tim Fort, assistant professor of business ethics and business law, and Reuven Avi-Yonah, the Irwin I. Cohn Professor of Law, moderated the discussion focusing on ethics.
Richard Painter, professor of law at Illinois Law School, recounted unsuccessful efforts working within the American Bar Association to strengthen ethics rules. Lawyers and other professionals need to figure out their values in life and bring their professional lives in line with those values, Painter said.
PANEL ON PUBLIC AND PRIVATE MONITORING
Academics and representatives of private and institutional investors discussed the role of outside gatekeepers such as federal regulators, underwriters and brokers, analysts and institutional investors in ensuring honest corporate accounting.
They also discussed what it will take to regain the public’s trust in the stock market, from new tools to enhance disclosure to codes of ethics for CEOs and senior financial officers and shareholder activism.
“Institutional investors are willing to pay a premium for good corporate governance,” noted Meredith Miller, assistant treasurer for policy for the State of Connecticut Treasurer’s Office, whose responsibilities include the development of a corporate governance program for the $18 billion state employee pension fund.
PANEL ON DISCLOSURE
In this panel moderated by Doug Skinner, the KPMG Professor of Accounting, accountants and lawyers offered their post-Enron perspectives on corporate reporting and discussed ways to increase investor confidence in the market.
Summarizing the discussion, Skinner concluded there is no simple solution. In the end, accurate, honest accounting depends on the integrity of management.
Larry D. Thompson, Deputy Attorney General with the U.S. Department of Justice since 2001, shared his personal views on how to curb economic fraud, based on 29 years in the legal profession, including 16 years as a defense lawyer.
Citing a series of economic scandals in our nation’s history, from the bankruptcies of savings and loan associations 10 years ago to the real estate scams of the 1700s, Thompson said, “America has overcome each of these jolts. Each scandal has brought better rules.”
However, regulations alone will not deter white collar criminals. The Justice Department’s job, Thompson said, is to concentrate on corrupt businesses and to send the guilty to jail for a long time.
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Read more about the Louis and Myrtle Moskowitz Symposium on Resilient Capitalism in the upcoming Spring 2003 Dividend, the Business School's alumni magazine.