Ethics Is Hot Topic at VICA Conference By JACQUELINE FOX Staff Reporter Forecasts typically look ahead. But this year’s annual Business Forecast presented by the Valley Industry and Commerce Association was mired in discussion of what will certainly go down as the 2002 business leitmotif: corporate malfeasance. Bottom line: Ethics must return to the boardroom before Wall Street can change the image. The good news: it’s gonna happen, and probably sooner than we think. How long it will last, however, is open to debate. “Ethics and How It Affects the New Bottom Line.” That was the title of one of six panel discussions held throughout the daylong event, which drew roughly 450 at the height of the conference. According to the panelists tackling that topic, the book cooking that killed off Enron and all the Enronettes this past year helped lay the groundwork for a new corporate landscape. The business community of the future, they suggested, will be one where CEOs, CFOs, presidents and top-level executives not only gauge their company’s health by its revenues and assets, but also factor in values like morality, responsibility and keeping on the straight and narrow. Linnea McCord, one of three speakers on the panel, an attorney and professor of business law at Pepperdine University, presented some startling statistics indicating just how lopsided corporate America has become since the freewheeling days of the 1980s. For example, she pointed out, today’s top CEOs make roughly 458 times more money than their rank and file workers do. “In the 1980s, the figure was 45,” she said. McCord suggested that, as bad as it may look to outsiders, because the U.S. legal system is so much more effective than that of other countries, it has the built-in power to force changes in business, with or without a consensus on what needs to be done and when. She also said that, although there will be new ground rules to play by in the very near future, the turnaround point is not that far off. “I think in terms of ethics and what’s been happening here since Sept. 11 with corporate malfeasance at the top of everyone’s mind, particularly investors, that it’s inevitable things have to change,” said McCord. “The legal system in place will take care of that because it has a way of forcing the business community to self-correct, and it’s going to happen rapidly.” Bert Boeckmann, president and owner of Galpin Motors Inc., and Jim Garrison, president of Pacific Federal Insurance Corp., were also on the panel. The ethics theme ran through other panel discussions, including one on the media and “Covering the New Corporate Culture.” However, one of the panelists in that session, Jonathan Friedland, Los Angeles bureau chief for the Wall Street Journal, was not quite as optimistic about change as McCord. Friedland agreed the rules governing the way the country does business are being re-written, but he added that history has a way of repeating itself and that, eventually, those rules will also be broken. “Eventually, what we are seeing happen today will happen again and we will go through another round of changes,” he said. Martin Cooper, owner of Cooper Communications and Business Forecast conference chair, said the “Era of Responsibility” theme was an obvious one for this year’s confab because the issue has impacted every business. “When we started to toss out ideas for this year’s conference theme, we asked ourselves what people were thinking about,” said Cooper. “Obviously, since 9/11 things have changed on the business front and much of it has had to do with ethics and responsibility. I think what’s happened has really been a wakeup call for business owners, so it was important to us that we attempt to address the issues that are connected to that.” “There’s an old political slogan that says you can’t legislate morality,” said Cooper. “Well, that’s changing. I think business people are going to be looking at that issue very differently. It’s not going to be just the fear factor of the government leading officials off to jail, but individuals in business are going to be looking at themselves and saying, ‘How am I running my business?”‘ Cooper said attendance was not impacted by the absence of Mayor James Hahn who canceled plans to attend this year’s conference due to scheduling conflicts. For the last decade, the mayor of Los Angeles has given an annual “State of the Valley” address at the VICA conference. Hahn’s 11th-hour decision not to attend, many in the Valley business community believe, was likely tied to VICA’s pro-secession stand. Hahn has agreed to give the address at a VICA meeting in December.
