Live in Happyville
Q: A cloud of volcanic ash grounds European airlines and the chief executives of KLM and British Airways join their crews on test flights to show that it is safe to fly. What do these actions say about the importance of symbolic involvement by top leaders in responding to crises?
Good for the CEOs who took test flights in Europe to show that it is safe to fly. It's one thing for the CEO or other top executives to say, "The skies are safe," but another to hop on a plane one's self to demonstrate just that.
It's always been surprising that other companies haven't followed this lead when declaring such things as "The air pollution emissions from our plant pose no risks to the people of Happyville," or, "The drinking water in Clear Lake is not adversely affected by our agricultural operations." Such claims would be infinitely more convincing if the top managers of the companies involved actually lived in Happyville or Clear Lake. Why don't companies require them to do so?
This is no different, really, from a requirement that mortgage originators, say, or the banks that bought mortgages and sold them to the public after dicing them up, themselves must hold a certain fraction of the "assets" on their own books. Would Goldman have so quickly sold the CDOs that John Paulson allegedly created for them had they been required to hold some for their own accounts? Putting one's money where one's mouth is is not only good common sense; it might also form the basis for good corporate and perhaps even regulatory policy.
The comments to this entry are closed.