The CFC, ethics and the politics of corruption
SPRAGGETT ON CHESS
When news of the OCA scandal about the 120,000 dollars that went unaccounted for (originally a Trillium Foundation grant) first became public in the Canadian chess community a few years back, the reaction of those most closely linked to the epi-centre of the scandal (and who should have been knowledgeable of the whereabouts of the unaccounted for money) was denial of any wrong-doing and of claiming to be out of the loop for 2 whole years (!)–despite there being regular meetings held during this period! Whether their excuses would hold up in a court of law and exempt them from personal and collective responsibility, we will likely never really know because the police were not called in to investigate and what little documentation existed on this sordid affair was shredded by the CFC president immediately following the re-structuring of the CFC, Eric Van Dusen, who had been an active member of the OCA during the period of the said scandal.
Many in the chess community were horrified by the manner this scandal was swept under the rug, and continue to be amazed at the selective blindness of those who continue to vote some of these people connected to the Trillium scandal back into elected office year after year. As for the individuals most directly involved in the OCA leadership, (OCA president Barry Thorvardsson and VP Hal Bond), the scandal did not appear to shame them or embarrass them: infact, quite the contrary: each immediately announced that he would run for the CFC presidency , as if it (the missing money) was just water under the bridge!
Thorvardsson, however, soon came to his senses and withdrew his candidacy and has to this day completely disappeared out of sight from the Toronto chess community; but Hal Bond did not back way and hide and ran and was elected president of the CFC for one term.
He still serves on the CFC executive today…And what is worse, here we are in close to the end of 2011 and another $100,000 (this time CFC youth funds) has disappeared and all financial records of it have gone the way of the DoDo. They simply do not exist. Trillium re-visited….
Then the failure of the CFC executive to properly follow its own rules and procedures when trying to decide the Canadian Open/CYCC bids last year lead to lively discussions on the message boards. Some raised other questions about conflict of interest issues. Some raised questions about contaminating the bidding process once the bids had been formalized. Others questioned the CFC president’s decision to support one bid more than the other, when he should perhaps have abstained and voted only if a deadlock was reached.
Conspicuously absent from these discussions were the men who were on the front line : the executive members of the CFC who were responsible for the entire decision making process right from the beginning. Nothing strange here, ofcourse, as the CFC has become an organization that acts as though ethics– in day to day affairs– is an option, much like choosing a pizza topping at your local Pizza Hut.
CFC past-president Bob Gillanders: should have been thrown out with the dirty laundry
Below is an interesting article that I found about business ethics. The author explores the issue of ethics in a manner that should be applied to the CFC, or any other nation-wide volunteer organization. I could not but notice how the author is very direct about ethical infractions and appearances: that you need to be very transparent, very aggressive and very concerned about ethics issues.
As David Shedd points out, ”Only by doing the tough and right things of setting an example, maintaining the discussion, and aggressively chasing down and then publicizing transgressions will you bring your high values in ethics and integrity to life for you and your entire company.”
Is Your Business Ethical?
”We do not act rightly because we have virtue or excellence. But, rather we have those because we have acted rightly.” — Aristotle
The times are tough. The pressure on you and all your employees is intense. You have employees that are being foreclosed upon. You have managers that cannot make their numbers. You have teams of people who have worked longer hours for no extra pay and feel that they “deserve” something more for their efforts.
In short, the conditions are fertile for ethical infractions in many companies.
As the leader of your company and/or business unit, how do you ensure that your solid ethics and high integrity infiltrate your organization completely, thus minimizing the risk of ethical violations?
First, I will tell you what not to do. Do not do what every company does. Do not bring in a consultant or a canned program discussing ethics and integrity and have everyone be forced to sit through the program and answer 10 ridiculously simple questions that Bernie Madoff could answer correctly blind-folded. This a waste of time and somewhat insulting to your employees with virtually no impact other than ensuring that you can say that you have an ethics program.
You need to do the following three things:
1.Set the example
2.Regularly talk about ethics and ethical situation
3.Be aggressive in chasing down ethical violations and then air the dirty laundry
Set the Example
My regular readers knew that setting the example as the leader was going to be one of the three keys. It is vitally important that you are and that you are seen to be ethical. That means not involving yourself in any situation that may appear to be unethical or inappropriate.
Of course, this applies to the big and obvious ethical violations such as taking bribes, kickbacks, collusion, or price fixing. Do not even go near any of these things being especially careful about conversations that you may have with leaders of competitor companies at trade shows or trade association meetings.
Further, be attuned to the risk to your reputation found in the gray area of such things as favoritism, nepotism or excessive entertainment or gift-giving.
Finally, be seen setting the correct example in small things. Yes, you are the leader of the company, but… Do not take office supplies and bring them home. Do not use tools or any other items for your personal use. Do not treat yourself to special breaks that are not available to others. Be especially aware on all your expense reports that you pay for everything that could appear to be personal or explain why they are bona fide business expenses. Yes, bookkeepers and accountants are not supposed to talk, however… In short, every small ethical transgression eats away at the fabric of what you are preaching.
Be ethical and be seen to be ethical in all things, big or small, black, white or gray. Enough said.
Regularly Talk about Ethics and Ethical Situations
This is easier than you think. When you attend meetings or have training sessions or have brown bag lunch sessions, bring up ethical situations that you or others in the company may have seen. Make sure that they are relevant to what the employees might experience at the office or factory. Invite 5 – 10 minutes of roundtable discussions. No more. And repeat on a regular basis. Over time, it will be more powerful if others in the group discuss ethical situations that they have encountered. By discussing, you lay down the ethical framework that you and your management team want and you will often set policy for certain types of ethical situations.
Some discussions points
1.A supervisor in the plant borrows tools over the weekend to do a personal task
2.A salesman exaggerates and embellishes his or her expense report
3.An employee in the plant sees a broken item in the trash that he can fix and takes it home
4.Unethical incidences at other companies that you may have heard or read about
The key in all of this is the example, the discussion, and you or your top management team driving home the ethical issues.
Be Aggressive in Chasing Down Ethical Violations and Then Air the Dirty Laundry
I have personally failed in the past on aggressively chasing down ethical violations.
Several years ago, there was a good employee reasonably high up in a very successful and profitable business unit. The individual was, to my view at the time, devoted to the company and was definitely a workaholic, traveling 3 ½ weeks a month. Some discrepancies appeared in spending with his credit card. We immediately confronted him. He denied everything offering an excuse that stretched the boundary of credibility, but could have happened. We believed him and did not dig any further…
By now, you know the story.
Several months later, other discrepancies came to light, we finally decided to investigate in depth, and it was revealed that this individual had used corporate funds to buy personal items. Once this was determined, we acted immediately, and the individual was terminated. The monetary amount was not that high – $5,000 – $10,000. But, the damage to our reputation was much higher. This person, by virtue of his senior role, was, in the customer’s eyes, a reflection of our company. As a result, both suppliers and customers thought that this business unit lacked high ethical standards.
The lessons learned are ample:
1.Without pre-judging, where there is smoke there is usually fire. So, seek it out.
2.When you find out about something, it has usually been going on for a long time and is a whole lot worse than you first thought.
3.Any employee’s lack of ethics represents, in the minds of outside stakeholders, the lack of ethics of the company.
The fourth point that we learned is that you need to air the dirty laundry about these incidents. For legal or other reasons, most companies sweep such events under the rug and they are only known through the “rumor channel.” Don’t do that. As we did in this situation, explain what happened (you can do this in vague enough terms to please your corporate lawyers or human resources department), explain how it went wrong, explain what you did wrong, explain what lack of control has been fixed and how you will act differently. As I said, this Mea Culpa (“I’m guilty!!”) is not the easy way to go, you expose your weakness and mistakes to your team. But, doing so really begins to show your strength, your leadership, and your commitment to ethics and integrity.
Finally, ensure that you report on other incidents that might have happened at sister companies.
The character, ethics and integrity of you and your entire team are really the bedrock upon which your businesses success is built.
1.Financially, you want ethical people in your organization to be your eyes and ears to ensure that others do not steal or defraud and to communicate that fact upward if it happens.
2.Legally, an ethical organization is much less vulnerable to lawsuits and retribution.
3.From an employee perspective, ethical people want to work with ethical people. You, as the leader, may be the most ethical person in the world. But, if an employee’s immediate supervisor is not, then, in that employee’s mind, the organization is an unethical, potentially corrupt, organization.
4.From a customer’s perspective, they assume, rightly or wrongly, that any unethical act by an employee has the blessing and support of higher management.
When the customer is aware of the unethical act, it is, of course, obvious to them. Thus, they think that it should be obvious to everyone in management at the organization,
Ergo, the organization is unethical.
Only by doing the tough and right things of setting an example, maintaining the discussion, and aggressively chasing down and then publicizing transgressions will you bring your high values in ethics and integrity to life for you and your entire company.
David Shedd is an experienced corporate executive, now consulting and blogging on Winning B2B Leadership. See more articles by him at http://davidsheddblog.com, or contact him directly at [email protected]SPRAGGETT ON CHESS