The Puritans at Boeing

Europe must no doubt be thrilled to see America's latest idiotic puritan spanking: the firing of Boeing's CEO, Harry Stonecipher. He had an affair, and the board tossed him out, saying Stonecipher himself had created a no-second-chance ethics policy that left no choice.

Why would Europe be happy? Because that's Airbus, the only serious competitor to Boeing in the civilian aircraft market, is located. Seeing its adversary thrown into such turmoil over something so minor has to be a big win for Airbus.

Anyway, it's close to inconceivable that a European company would toss overboard a CEO for having an affair with another adult. In fact, it's totally inconceivable. An affair makes the guy look bad, but what on earth does it have to do with his job?

Maybe, as the linked Seattle Times story suggests, something else is going on -- because this firing doesn't make a lot of sense.

Or maybe America is turning into a nation that has totally lost proportion.

Comments

[Anspar Jonte]

What does it have to do with his job? He boinked an employee. I'm no prude, but even I see the implications.

[Anspar Jonte]

1) Married? Yup.

2) Boinking on company time? Not yet. Hey, it was only January. Give them time.

3) Relationship using company resources? Not yet, spring had yet to show its first flower blossoms.

4) Relationship influencing the status of the lower rank employee? Not yet, they were still together.

5) CEO setting a bad example for other employees? You betcha.

6) Violation of the company's code of conduct? Clearly.

7) Must the CEO comply with the same rules as the basement janitor? Yes.

I applaud Boeing.

[Tom Bridge]

It colors his professional judgment, though. He could be more willing to tolerate bad reports, and all sorts of other issues. Love in the boardroom makes for bad business, not to mention the fact that it probably violates company policy, etc.

Good call for Boeing.

[Marcus Brandybuck]

Dan, You are right to be concerned over American puritanism. My personal distaste is the degree to which we, as a culture, have forgotten that we all need redemption from time to time in our lives - and that that process seems always to have amazing results. Per Boeing, I think the issue is that we have a CEO and an EMPLOYEE. I wasn't even married (nor was she) when quite taken by a delight of a woman who worked at my then company. But the policy was very clear and the standard was the 'appearance' of violation and I abided by it. Boeing did the right thing. Stonecipher knew the rules. Don't like 'em, then don't sign up.

[Owen]

I gotta disagree with you on this one, Dan. Leadership IS his job, and the boss' performance HAS to be called into question when the person at the top shows callous and arrogant disregard for good judgement, personal ethics and respect for organizational rules. Like conflict of interest, the people at the top must set the standard and model desired behaviors.

Whatever my personal beliefs about relationships, it doesn't matter to me as a business person who does what with whom, assuming it's totally consensual and not done on the boardroom table. (It maybe a leap to believe that a superior/subordinate relationship is ever completely free of pressure, but I'll give him the benefit of the doubt.) It does matter to others in the organization who are dealing with either or both of them and wonder what effect the relationship will have on decisions and objectivity.

As COO I had to confront my boss with problems caused by his relationship with another exec. He understood the potential problems that caused; she took a promotion to another organization and they later married.

[rick gregory]

Dan,

Part of the issue here is that Stonecipher laid down the code of conduct himself. To excuse a clear violation of that code by a man who not only was the CEO but was the originator of the rules would send one of two possible messages - 1) the code is meaningless, don't worry about it or 2) the code won't be enforced if you're senior and/or connected. The rest of you better watch out though...

Had this not been the issue, I'd agree with you - there's no indication that the relationship affected performance at all, nor was she a direct report. It would be enligtening to see if this would have happened if the code of cnduct violation was some other personal conduct issue not related to sex.

[Joe Buck]

These things are almost always about something else. Remember Bernard Kerik, who was allegedly dropped as nominee for director of homeland security because of a supposed illegal immigrant nanny? It turns out that he was involved in other scandals up to his eyeballs, and a number of reporters covering the case believe that there was no nanny. The nanny story was a convenient excuse for dropping the guy without exposing just how badly the vetting process messed up.

If the Boeing board had loved this guy, they would have made the problem go away, maybe in the way that Owen described.

As for the person who talked about "boinking on company time": there is no concept of "company time" for a Fortune 500 CEO. Those guys work around the clock and spend their lives on the road. And anyone so naive to think that a company expects the
CEO and the company janitor to follow the same rules is a fool; life doesn't work that way and companies claiming otherwise are not telling the truth. A strong CEO will be protected, a weak CEO will be pushed out when an excuse emerges.

[Joe I.]

Dan -

You are completely wrong on this. I have a code of conduct in my consulting business. If I find someone from the top to the bottom having an affair they are fired. It is about judgement and ethics. I think the culture of unethical business practices like Enro etc. and excusing unethical personal behavior go hand in hand. It is not the sex but the mental judgement and personal ethics of the person(s) involved that matter. I am sure every one of those indicted CEO's from Worldcom to Enron had affairs. The odds that someone is unethical in business and ALSO in their personal lives is extremely high!

[LR]

Other respondents have made reasonable points about how a company's code of ethics should apply up and down the management chain, and I agree on that front. I assume the firing was over the fact that the ceo's affair was with another employee, not simply that the ceo had an affair per se. A firing simply for having an affair (i.e. with someone not at the same company) would turn my stomach, just as it does when such issues are blown out of proportion in the political world (Clinton nearly getting impeached for a blowjob?? Jebus H Christmas). As far as affairs within a company, I'd like to see a relaxing of current standards there, which I see as partly driven by the hysteria surrounding harrassment in the workplace; such hysteria was intended to address what may be a genuine issue, but crossed the line into "way out of proportion" many many years ago.

[Gerald Buckley]

Policy's policy. Pretty clear cut deal there. I bet the policy was laid down while Airbus was out there trying like hell (as in every day) to compete. The board did this with their eyes WIDE OPEN. And so did our little high profile love birds.

Is Airbus happy? I don't think they'll get any lift out of it really. In fact, Boeing management probably gets points for enforcement at the highest ranks. If that torques other 'chief something or others' or 'vice something or others' Boeing would probably be better off without them anyway.

[Tom Tucker]

Dan,

It seems to me you are judging Boeing for the judgement their board made about the company's top employee. You may be right what happened at Boeing will benefit Airbus, but what happens at Airbus is beside the point. Integrity and ethics must be restored in America's corporate environments.

[Anspar Jonte]

On a personal level, I don't equate disdain for marital cheating with Puritanism. I'm an atheist. If my best friend cheated on his wife, I wouldn't give him the time of day. If he confided in me, I'd tell his wife.

Must we be suspicious of a corporation when it exhibits ethical behavior?

[Guillaume Laurent]

Ob. disclaimer : I'm French. :-)

Well, at least from this side of the pond, Dan is totally right. This is yet another Lewinsky/Janet Jackson's breast case, which shows how much the US has its values turned upside down (not that France isn't going down the same road from time to time, unfortunately).

To those who think that someone who's having "unethical personal life" will also do unethical business : seriously, what's the color of the sky on your planet ? First of all, regarding ethics in life vs. ethics in business, may I refer you to the usual counter example :

>

See here for the answer :
http://www.phlux.net/bboard/message-1246.html

Second, regarding "ethical business", come on, be serious for a while. This is a no-holds-barred capitalist world, companies like Boeing, nor even Airbus, don't reach their top position through ethics, they do it through ruthless application of economics, like everybody else, or they'd have been bought out long ago.

So at least be honest with yourselves : you're glad the guy got fired because he had an affair, and outside of marriage that's just *bad*, according to your morals.

BTW, Melinda Gates used to work for Bill before they got married, right ? As far as I know, they had become intimate before walking down the aisle, so what does it really matter for a CEO to sleep with an employee ? What do you find more shocking, this, or firing hundreds of people while your profits are sky-high ?

We saw the same hypocrisy with the Clinton/Lewinsky affair : "oh no, it's not because he had an affair, it's because he lied". Right, and when Bush also lies and starts a war, he gets re-elected.

As long as the image of two people making love is found more shocking than two people killing each other, we'll have a problem.

[Anna]

Good advice from the monkeysphere -
"Don't pretend politicians are somehow supposed to be immune to all the backhanded [bleep]ery we all do in our daily lives and don't laugh and point when the preacher gets caught on video snorting [bleep] off a [White House reporter]'s [bleep]. A good exercise is to picture your hero -- whoever it is -- passed out on his lawn, naked from the waist down. The odds are it's happened at some point. Even [saintly person] most likely has hotel rooms and dead hookers in his past. "

[Karen M.]

I'm with Dan and Guillaume on this one... however, it was refreshing to read that so many men disapprove so heartily of adultery.

But, if everyone had to follow so strictly the rules most of you advocate, you'd make it awfully hard on women who want to marry, but only meet eligible men at work, and (since they still earn only 76% of men's earnings) would usually be on unequal footing... at least in status and power.

It would be interesting to compare Myers-Briggs types to see if there is some correlation (like P vs J). INFP.

[Al]

You've been on the Left Coast too long, Danno. The board did the right thing. It may not have come at a great time, but did Stonecipher have the time to spend on this rather than committing his full energy on the thousands of employees, vendors and customers??

[Al]

Karen M: I don't want to get to off-topic, but I'd like to know where that 76% number comes from? From what I can see, they take state unemployment insurance premium data from the states (that they can get data from) and turn the hours into full-time-equivalents by adding the hours up and dividing by the number of employees (male and female.) Since, I believe, more women work part-time jobs, their salary numbers are guaranteed to be less. So, while I don't think this explains all of it, I think it's part of the issue...and it behooves us to understand what the problem is rather than just believing some random number.

Again, I don't want to get too off here, but I couldn't let that pass.

[anon]

Um, I uh, work for Boeing, and I recommend the comments from FARK on this topic that includes comments from many current and former Boeing employees.

Some things to consider that do matter to me, Stonecipher implemented a relatively controversial program in which all 150,000 employees, each year, spend 4 hours on ethics training. If the average employee cost is $20/hour, and I suspect it's far higher than that, that's a $12,000,000 corporate expenditure on ethics and a loss of maybe a quarter to half of that that would have been billed to customers. And it's to address an ethics problem that most employees feel was caused by the unethical actions of a very few people at the top. I think the corporate wide ethics program was weak at best, nonillustrative and not operational, and sadly will lead to lower morale.

Now an affair is not necessarily unethical behavior as much as immoral behavior. But Gregory is correct, had it become public it would have sent a terrible CONFIRMATION of a message the employees have already received.

With my most cynical hat on, the Board had to fire Stonecipher as these ethics problems have led to the company being barred from certain contract and these bars had just been lifted with the caveat that the company has to walk a very fine line. And I mean just lifted as in lifted in the past week. So I wonder if that wasn't the reason the board got rid of Stonecipher, to protect the expendible vehicle launch program, the new tanker program, etc.

I mean, WE'RE AN AIRCRAFT COMPANY, not an OIL COMPANY, so Cheney can't even pronounce Boing and so the disbarments that Halliburton and KBR were able to get Cheney to lift wouldn't be so easily lifted for us.

Actually the worse message I heard came from some analyst on either All Things Considered or Marketplace. He noted that with the SEVERE ACTIONS OF FIRING SOMEONE OVER AN AFFAIR OR OVER UNETHICAL BEHAVIOR, HOW COULD BOEING HOPE TO HIRE SOMEONE ELSE AS CEO? WHERE WOULD THEY FIND SUCH A PERSON? I mean YIKES! To think that someone could expect a $20million dollar package and have to behave ethically? Where in America?

This past week we had an "Ethics Challenge" where the employees discussed three case studies in ethics.

ME? THE CASE I WAS HOPING TO HEAR ABOUT WAS
A) WHAT SHOULD ENGINEERS DO WHEN THEY THINK THE SHUTTLE MAY BE UNSAFE TO FLY AND MANAGERS SAY GO GO GO, or
B) IS IT ETHICAL WHEN MANAGERS ACT TO MOVE FACILITIES AND MOVE PROGRAMS AND TELL THEMSELVES AND CUSTOMERS THAT THERE IS NO IMPACT ON SAFETY.

But we didn't discuss *those* ethical problems.

Oddly enough, I am very happy to be at Boeing, but I do believe that the Aerospace industry and the world would be better served with many larger, smaller players.

[donna]

We have a really serious hangup in this country about sex. I think it is in reality a power issue of men wanting to control women's sex lives. Certainly a married man conducting an affair with an employee is immoral and a big deal, and highly unethical. But if it is a consensual relationship, there is an element to it that to me says, this is between two adults, and none of anyone else's business, except perhaps the wife's, who is free to divorce the scum-sucking maggot. If he was using the affair to exert some power over the employee, different issue and sexual harrassment. But let's not confuse the two...

[CG]

Well, here's my 2 cents worth [you get what you pay for].

This big-deal executive spots this really gorgeous woman, and he flips out for her. It turns out that she's married. Does that slow him down? Not on your tintype! Not at all.

He simply has her husband bumped off, so she'll be available. Then, being a kindly kinda guy (?), he consoles her in her grief. They get to be really chummy. Then they jump in the sack and go at it -- time after time.

So, what happened to him?

Several of his Psalms were published in the Bible.

[Jogy]

First of all - I am living in "Old" Europe.

This affair is something, which has become typical for the US - at least from a foreign point of view.
There are CEOs, politicians and other big or small bosses clinging to their offices in spite of accounting frauds, corruption and (proven) lies. And then one guy has to leave because of a love affair. This is ridiculous.
Is this the moral and freedom the Americans want to teach to the world? Sorry, I do understand Peoples refusing such a gift.
So let me translate this to some simple words:
You may cheat and lie but you must no fall in love!

I hope for Boeing that this is just an excuse for some other deficits, but then if they are so moralistic - why not speak out the truth.

[Ian Betteridge]

Having been a manager, I can understand the potential problems when a manager is having an affair with someone that he has responsibility for. However, it's also a fairly simply thing to get around: You're upfront about the situation with your highest-level human resources person, you put it on the record (but confidential, obviously) and you remove yourself from that person's direct line management if you're in it.

But hey, a country founded by puritan religious zealots isn't often in favour of pragmatic solutions :)

[George Walker]

Boeing did win a big contract for the controversial Irish airline
Ryanair
so maybe Airbus are just snickering rather than laughing out loud.

[Owen]

We're getting things mixed up here in the responses. Most of the negative reactions to Dan's position seem appropriately focused on the leadership issue of him violating company policy and potentially causing conflicts of interest...not on the morality of the affair. Adultery (or any kind of consensual sex between otherwise unencumbered adults) is indeed a private matter and shouldn't be a topic for board concern. I am offended by violations of the marriage contract, but that's a private matter and don't expect others to adhere to a standard I set for myself.

Ignoring laws, codes of conduct, company directives, or good management practices IS the company's business. Stonecipher's lack of good judgement and common sense ought to be cause for concern.

[Richard Silverstein]

I couldn't agree with you more, Dan. In fact, I wrote a post myself with almost the same title: Boeing and the Stonecipher Affair: American Puritanism Triumphant. Those (including the Boeing chairman & board members) here who say he was fired for violating the company's code of conduct should read Platt's statement yesterday in which explicitly acknowledges that Stoneciphere did NOT violate the code, since the code does not prohibit adultery or even affairs between employees.

But did he do something stupid? Did he do something no one would condone in terms of personal behavior? Sure. But does that rise to the level of a firing offense when you're running the company exactly the way the board wants you to & achieving great success as well? No way.