PUBLICATIONS Inside Illinois Vol. 24, No. 19, April 21, 2005

UI president shares life lessons during lecture on ethics

By Sharita Forrest, Assistant Editor
217-244-1072; slforres@uiuc.edu

Click photo to enlarge Photo courtesy College of Business University President Joe White talked recently during the Leighton Lecture on Ethics and Leadership. He told students at the College of Business : “Your most valuable assets are your integrity, your independence, your reputation and your peace of mind,” he said.

The important thing in life is simply to be able to look yourself in the mirror every morning without flinching.

That was the advice university President Joe White said he received from his father while he was growing up and that he passed on to College of Business students when he delivered the 2005 Leighton Lecture on Ethics and Leadership. White, who holds an appointment as the James F. Towey Professor of Business and Leadership in the college, spoke to a crowd of about 150 students and other members of the campus community on April 11 at Wohlers Hall.

Recent scandals such as those
involving domestic diva Martha
Stewart, former Enron chairman Kenneth Lay and the Arthur Andersen accounting firm have created a “train wreck” and “crisis of confidence in American business leadership, and we’re all paying the price,” White said.

Exploiting – instead of avoiding – financial conflicts of interest in pursuit of personal gain was the single overarching transgression in the corporate scandals of recent years, White said, and he urged students not to miss the abundant lessons these scandals teach about the consequences of failing to live up to seemingly simple principles of honesty, adherence to the law and upholding one’s responsibilities to stakeholders.

White, an independent director or trustee of several companies, cited an incident from his own experience that occurred during the 1990s when he was the dean of the business school at the University of Michigan. Sam Wiley, an alumnus of Michigan and board chairman of Sterling Software Co., had committed to giving $10 million for construction of a building bearing his name on the Michigan campus.

But Wiley inadvertently created an ethical dilemma for White when he invited him to serve as an independent director of Sterling Software.

Although White initially agreed to join the company’s board, after attending his first board meeting he realized his ability to serve as an independent voice on the board would be eclipsed by his primary responsibility to the university and his subsequent relationship to Wiley as an alumnus and major donor. The board appointment, which White believed was motivated only by Wiley’s generosity and mutual respect, would be tainted if people were to interpret it as quid pro quo for supporting Wiley’s decisions as board chair.

White said that forgoing the directorship was the right choice in
the long term because “a clear conscience is truly priceless.”

Financial conflicts of interest abound in professional life, White said, and he urged students to be “high integrity professionals and persons” throughout their lives, no matter how great the temptations might be to pursue short-term personal gain.

“It won’t be easy,” White said, “but it will serve you extremely well. Your most valuable assets are your integrity, your independence, your reputation and your peace of mind.”

In responding to a question about how the university might better prepare students to navigate the murky waters of the business world, White said that he believed integrity is “forged at an earlier age than college.” However, faculty members could reinforce basic values by weaving ethics lessons into the core curricula and illustrating for students how conflicts of interest and other dilemmas will arise. Integrating these lessons into accounting or business courses would be more beneficial to students than teaching ethics as an isolated subject, White said.

When another student said that choosing to do the right thing involves courage, White concurred, saying that it may put people at odds with their colleagues and with the American value of wealth attainment.

“The intense pressure to perform – to grow a business, to manage costs and drive earnings – has unintended consequences, including the temptation to cheat in pursuit of economic gain,” White said.

One consequence of the corporate scandals of the past several years was passage of the Sarbanes-Oxley Act of 2002, which established stringent guidelines for corporate governance, financial disclosure and internal control practices in publicly traded companies. While the resultant costs of the law may be substantial, especially for small businesses, White said the backlash from the scandals also is fostering positive changes in corporate America, prompting directors and auditors to be more attentive and counterbalance the competitive pressure felt by staff.

Another unintended consequence of the law is it is enhancing the cachet of auditors and boosting salaries, White said.
“What a great time to go into the accounting and auditing profession,” White said.

The Leighton Lecture on Ethics and Leadership is named in honor of Richard Leighton, who attended White’s presentation, and his wife, Grace. The Leightons donated the funds to endow the lectures.

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