Sandusky trial reveals dilemmas of leadership and corporate governance

Bloggers have the luxury of offering opinions which sometimes influence popular opinion.  But speed of reaction almost always results in lack of detailed analysis.  The Sadusky football coach/child abuse scandal at Penn State is a case in point

The story caught my attention, as it provides insights into corporate responsibility, social influence theory, willful blindness and dilemmas of leadership. My thoughts are mostly around the dilemmas raised by the case, and for responsible bloggers

The complexities of the case

As I dug into the news [Oct-Nov 2011], I became aware of the complexities of the case as the ‘map’ of the trial shows. The Grand Jury report also reveals those who subsequently were fired [up to Nov 9th 2011]. It suggests the dilemmas facing the Penn State football coach Mike McQueary who had observed Sandusky molesting a student [in 2002].  Also the dilemmas for other individuals at Penn State as the story was passed up the line at Penn State.  

McQueary’s dilemmas

Stanton Peel presents the story from the point of view of McQueary:

The most common response I have heard about the Penn State football-child abuse scandal is that Mike McQueary should have notified the police, and that he should be punished. McQueary was a graduate assistant coach at Penn State in 2002 when he allegedly observed Jerry Sandusky, emeritus Penn State coach [molestiung a student] in Penn State’s locker room shower. McQueary immediately called his [own] father.

The next day, per his father’s recommendation, McQueary called Penn State’s legendary head coach, Joe Paterno, then went to Paterno’s home to inform the coach of what he had seen. Paterno reported some version of what McQueary had told him to athletic director Tim Curley. Subsequently, McQueary met directly with Curley and Penn State finance vice president Gary Schultz to describe what he had seen.

And that was it. Nothing happened to Sandusky; nothing was done for the child, or any other children Sandusky had assaulted. Years later, when a grand jury uncovered these events, Curley and Schultz were charged with lying to the grand jury; then Penn State fired Paterno and University president Graham Spanier.

No immediate action was taken against McQueary, who had become coach of wide receivers for the team. At first he was to be kept out of Penn State’s next game to protect him from irate fans. Then, the University’s attitude towards McQueary shifted, as more public ire was directed at him. He has since been placed on administrative leave.

Doing no evil and free expression of opinion

The battle for responsible blogging is as worthwhile a cause to defend as the right to free expression of opinion. Google got it right when it opted for their slogan don’t be evil. But more recently the firm has begun to phase out its slogan, aware that the dilemmas of corporate life make “doing no evil” too easy a target for critics.

Blogging no evil

Bloggers capture the wishes and fears of our 21st century world. They often amplify emotional beliefs. It is the duty of what called the redress of poetry. However, much of blogging would be of greater value if bloggers took more time in attempting to dig more deeply. By identifying the dilemmas faced within a leadership story, we give ourselves a better chance to see beyond the targetting of perceived injustices. It may not change the world, but it helps the blogger avoid the dangers of willful blindness.

Glencore, the IPO and how to make shedloads of money

The Swiss Commodity traders Glencore has announced its initial public offering (IPO) of shares to arrange a subsequent upswing in the market.  The commercial logic of the move seems convincing.  The corporate governance side less so.

The announcement of the IPO drew attention to a secretive corporation.  At first the news was mostly on the scale and timing of the IPO. The company offering of $11 billion shares set a corporate value of around $60 billion. The IPO documentation alerted journalists to remuneration paid to its cadre of top traders. I couldn’t help thinking of the advertisement to be seen as you arrive at Geneva airport “Money talks but wealth whispers.” The Swiss have developed a well-justified reputation for financial discretion.

History

An earlier post oulined the discete nature of Glencore [global energy commodity resources].  Some stories were about the company’s avoidance of public scrutiny. More was made public of interesting remuneration statistics.

 The remuneration packages of Glencore’s traders dwarfs the average payout by banks to their star employees. For example, Glencore’s London-based oil traders earn almost four times the average paid to Barclays Capital’s investment bankers.

Simon Murray

Another story produced unfavourable comments on the uninhibited views expressed by its new chairman Simon Murray
Ruth Sutherland of The Mail online noted

Say what you like about Simon Murray, the veteran Hong Kong entrepreneur appointed to chair Glencore, but he cannot be accused of dullness. The choice of a 71-year-old polar adventurer and former French Foreign Legionnaire as chairman of Glencore always promised to be entertaining and so it has proved. Murray created a furore with his views on women in the boardroom, making it clear he wouldn’t be rushing to recruit any.

In contrast, someone who was appointed a director was Tony Hayward, the man at the centre of the BP oil-spill disaster. However, the BBC’s top business commentator Robert Peston was forced to retract a story that Lord Browne, Haywood’s mentor and former boss at BP, was to become chairman of the new floated company and at the same time revealed the appointment of Simon Murray. According to Peston, Lord Browne was rather too keen on conforming to corporate governance guidelines.

Citiwire reported that

Ivan Glasenberg [CEO, pictured above] will become one of Europe’s richest men after Glencore’s initial public offering, as the value of his stake will surge to almost $10 billion. Glencore priced its initial public offering on Wednesday [April 3rd] at a level that will give the commodities trading house a current valuation of between $48 billion and $58 billion.

City custom and practice

The Financial Times suggested that in time-honoured city practice, “Glencore set the price of the IPO below expectations in hope of stock rally”. Which, if I understand the euphemism is really good news to those who have signed up to the floatation. Words like “money, shedloads of” cross the mind.

Golf, Business and The Environment

Tudor Rickards, Susan Moger, and Leigh Wharton

Golf means big business. Around the world, from Dubai to Scotland to Singapore there is great competition to hold top tournaments as part of a regional development leisure strategy. But new golf courses also pose environmental challenges calling for innovative solutions.

In Scotland, the ancient home of golf, an initiative by Donald Trump met with protests for several years, although his proposals always promised to bring much-needed employment to a region in Aberdeenshire facing a decline in its fishing and North Sea Oil business. A BBC report noted:

Aedan Smith, head of planning and development at RSPB Scotland, [Royal Society for Protection of Birds] commented
“RSPB Scotland is surprised and extremely disappointed at this decision, which we believe is wrong both for Aberdeenshire and for Scotland. The development will cause the destruction of a dune system, with its precious wildlife, on a site which is protected by law and should continue to be available for future generations to enjoy.”

Trump lands in a bunker

Two years later [August 2010] the plans were still being contested bitterly. The Independent reported:

The billionaire Donald Trump last week clashed with protesters opposed to his controversial plans to build the “world’s greatest golf course” near Aberdeen. Quarry worker Michael Forbes, who is refusing to sell his property which adjoins the £750m scheme, claims Mr Trump’s workers unlawfully annexed his land. The clash is the latest skirmish in an increasingly bitter battle to prevent Mr Trump from developing the site. More than 7,000 local people have signed up to join the “bunker”, co-owners of an acre of land sold by Mr Forbes [a local land-owner] to disrupt the US tycoon’s plans. The philanthropist and co-founder of the Body Shop (Gordon Roddick) and Green MP Caroline Lucas are the latest to join the campaign.

Meanwhile at The Mull of Kintyre..

Meanwhile, in an equally beautiful part of Scotland, another venture was claiming to support economic regeneration. A multi-million pound luxury golf resort is set to boost a wider regeneration of Argyll and Bute, one of the most beautiful but poorest parts of the Scottish Highlands. The Machrihanish Dunes Golf Club is near the southern end of the Mull of Kintyre, made famous in a song by Sir Paul McCartney, the former Beatle who has a farmhouse on the peninsula. The course, which opened last year, lies beside the old Machrihanish Golf Club, which was built in the 1870s and regularly features as one of the world’s top-100 venues. Massachusetts-based Southworth Developments, the private company owned by David Southworth, a US property developer, took a controlling stake at the time. To date [Aug 2010] opposition seems far less than was received by the Trump project.

Golf and Environmental Responsibility

Recent visits to Dubai and Singapore have revealed similar recognition of the potential for golf to support plans for economic development. But the environmental debates do not go away. Letters in The Straits Times for example discussed the demands placed on precious water supplies. owever, the leisure industry has become sophisticated in acknowledging its environmental responsibilities. Singapore hosted an international conference in 2008

In his opening remarks, Col (Ret) Peter Teo, general manager of Singapore Golf Association, supported the need for courses to be environmentally and socially responsible. He suggested that Singapore could take the lead in golf excellence. Such a positioning, which would require multi-shareholder involvement by the clubs, government agencies, NGOs and the private sector, would show that Singapore cares deeply about nature conservation and that every stakeholder can participate.

Business, Leisure and the Environment

Business, leisure, and the environmental considerations have become intimately mixed. Students of leadership may find it instructive to consider what principles of leadership help in the evaluation of such global issues.