[Congressional Record Volume 148, Number 89 (Friday, June 28, 2002)]
[Extensions of Remarks]
[Pages E1187-E1188]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     CHANGING THE CORPORATE CULTURE

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                           HON. DOUG BEREUTER

                              of nebraska

                    in the house of representatives

                        Thursday, June 27, 2002

  Mr. BEREUTER. Mr. Speaker, this Member commends to his colleagues the 
following editorial from the June 25, 2002, edition of the Lincoln 
Journal-Star entitled ``Culture Change Is Needed in Corporate Crisis.'' 
The editorial suggests that changing America's business culture is the 
best long-term solution to the current crisis of business scandal after 
business scandal. These scandals have caused a

[[Page E1188]]

distrust of corporate America and decimated investor confidence. 
Ethical CEO's are needed to change the dishonest precedent set by some 
business leaders. Corporate culture needs to revert back to decisions 
based on American values, rather than greed.

              Culture Change Is Needed in Corporate Crisis

       The business pages of U.S. newspapers continue to read more 
     like police blotters than the usual financial news. In fact, 
     the average American may have simply given up trying to keep 
     track of who has committed what wrongdoing.
       The list of those indicted, arrested or resigning in 
     disgrace is indeed far too long, suggesting that the post-
     Enron business world is in worse shape than feared. The 
     result: a stock market in the tank, distrust of corporate 
     America at an all-time high and employees turned out on the 
     streets.
       Naturally, the breadth and scale of the business scandals 
     have prompted lots of discussion about reform. But what seems 
     to be at the root of the unprecedented wave of abuses is 
     something that can't be regulated: an out-of-control 
     corporate culture that embraces the Dark Side.
       As the current cases illustrate, dishonesty reigned in the 
     boardrooms of many publicly held companies. The allegations 
     include questionable accounting, insider trading and tax 
     fraud. Everyone seemed in cahoots: CEOs, accountants, 
     corporate attorneys, investment bankers, stock analysts and 
     boards of directors. In the end, many corporate chieftains 
     walked away from wrecked or tainted companies--scot free and 
     millions of dollars richer.
       But because accountability and ethics are so difficult to 
     legislate and enforce, changing the business culture is 
     perhaps the most enduring solution--although it is not 
     necessarily easy or quick. That requires change from within. 
     It requires, as Treasury Secretary Paul O'Neill suggests, 
     that ethical CEOs set the tone by denouncing the abusive 
     practices. It requires the gatekeepers--the boards of 
     directors, accountants, corporate lawyers and investment 
     bankers--to vigorously uphold their fiduciary and moral 
     responsibilities by providing oversight and leadership. 
     Shareholders, too, need to take a more active role.
       Some of the most potent reform efforts are coming from the 
     business world. One money manager has put together a hefty 
     group, including Warren Buffett, that intends to challenge 
     companies in the Standard & Poor's 500-stock index on 
     corporate-governance and executive-compensation issues. Among 
     the requirements discussed by the New York Stock Exchange is 
     that boards have a majority of independent directors, those 
     without a business or family tie to the companies.
       Whether it is pressure from prosecutors, the markets or 
     shareholders, the current corporate culture, bred in the boom 
     of the '90s, undoubtedly will have to change to salvage the 
     shaky stock market. The question at hand is whether the 
     transformation will be complete and long-lasting.

     

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