What Ever Happened To Accountability?

 
 
Accountability-2On the past Memorial Day, many of us watched as a wreath was laid at Arlington Cemetery and words were expressed about the sacrifice of so many.   It leads to wondering how those who gave their lives would feel about the lack of accountability in the VA hospital system where some veterans have died while waiting for an appointment.

While it is clear that this is a system that needs help both financially and with management, it is also clear that it was sheer greed that led to the fraud committed by those managers and executives that falsified records in order to obtain incentive bonuses.

In the same newscast, we saw interviews with business owners and residents of the New Jersey Shore who have been waiting over 19 months for financial relief.  In yet another case of gross lack of accountability, apparently no one is actually held accountable for getting funds distributed that Congress approved over a year ago.

 

That Master Of Management Teaching …

That master of management teaching, Peter Drucker, stated in his book, The Effective Executive, that:

“It is the duty of the executive to remove ruthlessly anyone – and especially any manager- who consistently fails to perform with high distinction.   To let such a man (person) stay on corrupts the others. It is grossly unfair to the whole organization.”

Drucker goes on to state that:

“It is grossly unfair to his subordinates who are deprived, by their superior’s inadequacy, of opportunities for achievement and recognition. Above all, it is a senseless cruelty to the man (person) himself. He knows that he is inadequate whether he admits it to himself or not.”

Although Eric Shinseki has been allowed to resign, government employees allegedly committing fraud are clearly handled differently than a businessperson or non-governmental individual.

 

A Respected Partner …

A respected partner in one of the largest, most successful law firms …

prison-timeIn one case with which we are familiar, a respected partner in one of the largest, most successful law firms in the country was charged with withholding the interest on a client’s escrow account.    At the time of the allegations, he was dismissed from his law firm, the bar association suspended his license and the case was investigated by the IRS, FBI, and SEC, all with trained staffs of forensic accountants and prosecutors.   He was convicted and is currently serving prison time.   The money amounted to hundreds of thousands of dollars and no one died.

 

Accused Of Accepting Kickbacks  …

Mining employees accused of accepting kickbacks …

In yet another, mining employees accused of accepting $2 million in kickbacks from vendors were terminated as soon as the allegations came to light.   They have since been indicted by the US Attorney.

While there is little doubt criminal acts have been committed, in the case of the VA, we are treated to the Assistant Chief of Staff for the President spending eight hours at the Phoenix VA hospital doing interviews.   And we are told that the agency, through its Inspector General, is investigating itself.   But where are the trained prosecutors and forensic accountants?   Why do those accused remain in their jobs?   With their bonuses!

 

In our Business …

In our business, we see ...

In our business, we see both the lack of accountability and focus on personal gain repeatedly. We have seen and worked in businesses where the following occurred:

1.  The CEO of a company cut all salaries, including his, during the recession. However, he also rerouted payments that were supposed to go to the bank in loan repayment to his personal account.

2.  A family owned company employed a family member who repeatedly stole from the company to support an addiction. Even though it was well known what was happening, the company kept him employed until he began taking personal items that belonged to other employees.
3.  The CEO of a multi-generation family company turned the day to day operation of the company over to a non-family COO and an unqualified CFO. The lack of supervision of these executives and unwillingness to address the financial failings of the company resulted in unmanageable debt and liquidation of the company as well as the CEO’s personal assets.

Corporate America loses billions of dollars per year in terms of employee theft, defective products, workplace conflicts, leadership and supervisory behaviors and loss of valuable employees due to disillusionment, discouragement and cynicism.

 

But The Greatest Loss …

But the greatest loss is incurred by …

But the greatest loss is incurred by our continuing acceptance of a lack of accountability in our practices, businesses and government. A statement by Army Chief of Staff George Marshall sums the issue up best:

“When standards are not rigorously upheld and inadequate performance is allowed to endure in leadership ranks, the effect is not only to rob the enterprise of some of its potential, it is to lose the standards themselves and let the most important capabilities of leadership succumb to atrophy.

It’s true for our practices, businesses and our government.