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Yash Gupta
Business School Dean

Yash Gupta

Yash Gupta is Professor and Dean of The Johns Hopkins Carey Business School.

Money from Taxpayers' Pockets

It's good that these companies are making money. Whenever organizations turn a profit, they hire people, and that's something sorely needed at a time of such high unemployment - 9.5. percent last month in the United States, a 26-year high.

But this is also a matter of proportion. To some observers, these profits might be unseemly, given the recent economic turmoil and the fact that so many people are hurting.

The response of these companies' leaders, then, has to begin with transparency. They must be transparent about how they're making their profits and how they plan to use them. They should be promptly volunteering information in a way that shows their willingness to be completely open and forthright.

The American people won't begrudge them their fiscal recoveries. Most people will probably say, "More power to them. Our big companies need to get back on track." But in this climate, suspicions will linger. There will be questions about how these businesses used any TARP money they might have received. After all, that money came out of the taxpayers' pockets. So the companies have a responsibility to be as transparent as possible.

Equally important is how these companies treat their employees -- letting the workers share in the benefits of renewed profits, doing things that improve the quality of the employees' work lives. It would also be a significant gesture for these companies to invest in their local communities, particularly if the communities are suffering. The businesses could do this through their respective foundations or by supporting local efforts that provide training to unemployed youth and laid-off adults.

A leader has to be sensitive to various constituencies in a situation such as this. The heads of these newly profitable companies just can't start handing out fat bonuses, as they did before. One would hope they have learned a lesson or two about arrogance after the problems of the past year.

By Yash Gupta

 |  July 20, 2009; 2:28 PM ET
Category:  Economic crisis Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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Yash,

What would be your message to the CEO's of AIG and other companies, who are willing to give $100'M for bonus's and then lay off hundreds of employees in the same month. It is absolutely a shame that there is no sense of proportion.

Posted by: NLNGRNVRLDD | July 21, 2009 11:01 AM
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