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NYSE Chair Speaks on Future of Business Ethics


Marshall N. Carter says that a personal ethical compass is necessary to successfully navigate ethical gray areas at work.
Photo by Chris Taggart

Will tomorrow’s business leaders be successful and still uphold the highest ethical principles?

The answer, said Marshall N. Carter, is yes. But there’s a catch.

Carter, chairman of the New York Stock Exchange Group and deputy chairman of NYSE-Euronext, cautioned business students on Feb. 15 that they may need to keep their résumés up to date to remain ethical.

“Can you be an ethical person and an effective businessperson? Yes, but you may—at some point in your career—have to change companies if you are not happy with the ethical environment,” he said.

In “Thoughts on Leadership and Ethics After 49 years in the Workforce,” Carter mapped out ways that businesses will be different in the future and presented several ethical dilemmas that he faced in his career.

His appearance on the Lincoln Center campus was part of the Flaum Leadership Lecture Series.

The next generation of business leaders, he said, will work for six or seven companies, on average, as opposed to three or four as their parents did, or one or two as Carter’s generation did.

“These companies will look quite different; they will require more leadership and an increased focus on values and ethical cultures because they will be global companies, and have to balance varying norms of behavior,” he said. “Some of you are probably already meeting these challenges.”

As an example, he presented a situation in which a new hire from a competitor arrives on the first day of work with a copy of the competitor’s confidential strategic plan.

“Is this windfall business intelligence or theft?” Carter asked. “Actions that are illegal are usually straightforward. It’s the gray areas often occurring in day-to-day activities that require personal ethical compasses.”

Carter also delved into some of the problems that contributed to the financial crisis of 2008. Quoting from a recent column in The New York Times by Ben Stein, he noted that when the Securities and Exchange Commission was formed in response to the stock market crash of 1929, “the investor’s interests always had to be superior to those of the investment bank, financial adviser or broker.”

Over the past few years, companies seemed to favor Wall Street-based financial transactions over basic commercial operations, and that needs to change, he said.

“What’s the correct ‘metric’ for corporate leaders? Clearly, large salaries, bonuses, stock options and performance shares are part of the problem, but they do have the advantage of being measurable and quantifiable,” he said.

In a question-and-answer period, Carter touched on everything from how his service in the Marines influenced his career to how banks can regain trust (focus more on lending to businesses, less on profits). He also said that boards of directors at large companies deserve scrutiny for their roles in the recent financial collapse.

“What’s happened with the American regulatory environment is we are rule-based rather than principles-based. Very often boards of directors become what would be known as compliance boards. They spend all of their time checking off boxes to ensure they remain within the rules, rather than going off for a weekend and thinking about the strategic direction of their company,” he said.

“With the exception of Enron, I don’t believe any board of directors has had criminal penalties exercised against it or been forced to pay back. That’s a little disappointing, given what we’ve seen over the last three years.”

The Flaum Leadership Lecture Series was founded by Sander Flaum to provide students in the Graduate School of Business Administration at Fordham with opportunities to connect with notable business leaders.


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