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Some examples:
---- Charity: Doing good for free and if you're really serious about it, anonymously, too.
---- Corrupt: Rotten. Working against the good. When you smell it, get rid of it before it spoils the whole barrel.
---- Duty: Obligation. You know what you must do.
---- Ethics/ethical: Ethics = morals. Fundamental ways for getting along well.
---- Good: Worthy of public acclaim. It's what people nod their heads to and say, “Well done.”
---- Greedy: You want more. You need more. You don't know how to share.
---- Mercy: Forgiving the past. Intentionally letting go for a reason.
---- Wrong: A turn you should not make.
The late Peter Kiewit focused on hiring people of integrity as he created an Omaha company that profited, in part, because of high ethical standards, according to his successor, Walter Scott.
Yet Scott, who retired 13 years ago as CEO of Peter Kiewit Sons' Inc., described Tuesday how he had to deal with two ethical violations that cost the company hundreds of millions of dollars and made clear the importance of ethics in business.
Scott, speaking to about 150 people at the annual meeting of the Greater Omaha Business Ethics Alliance, talked about Omaha's history of ethical business conduct and warned about the challenges of finding a new generation of ethical business leaders at a time of "broken homes and moral relativism."
"We can no longer assume employees come to us with the ethical tool kit of previous generations," he said. His talk at Creighton University's Harper Center received an extended standing ovation from the audience, which included top officers of many of Omaha's leading companies.
Scott said he worked alongside Peter Kiewit for about 20 years, and Kiewit rarely used the term "ethics" but rather focused on integrity, especially when it came to hiring people.
Scott related a comment by Kiewit during a company meeting in 1950: "No matter how much native ability a man may have, no corporation dare employ him ... unless he is fundamentally and entirely honest and trustworthy. Without this, his very ability is all the more dangerous."
Yet shortly after Kiewit's death in 1979, Scott had to deal with a scandal involving senior managers of one of the company's divisions who were accused of colluding with other contractors to fix some state highway bids.
"The problem was, it was true, and several employees were sentenced to jail time," Scott said. Although other Kiewit executives were acting properly, the conduct of a few was "like a boat leaking on one end," threatening to sink the company's reputation and jeopardizing its ability to bid on government contracts.
The incident was so serious that it eventually had a silver lining, Scott said. "It served to raise to the highest level among our people the awareness of the proper conduct of our business," he said, and "in the long run has served to strengthen the Kiewit culture into one with a more focused emphasis on ethical business practices."
The second incident came in 1984 when Kiewit acquired Continental Can Co. Scott said he was aware of a pending pension lawsuit at the time of the purchase but was told by Continental's attorneys that it was a minor matter.
"That turned out to be false," he said. Continental's earlier management had violated federal pension rules by laying off people to avoid paying pensions. Several years after it purchased the company, Kiewit looked more closely at the merits of the lawsuit and "chose to face up to the liability and settle — for $415 million."
After the settlement, Continental still had additional pension problems, he said, so when Kiewit sold it in the early 1990s, the $336 million price was probably one-third of what the company should have been worth.
Continental's management violated the ethical principal of preserving the business's financial vitality, Scott said, destroying two-thirds of its value by "cutting ethical as well as legal corners."
As for the future, Scott said, ethical conduct in business may be increasingly difficult because society has changed.
"Schools tell children that one culture isn't necessarily better than another," he said. "That's patently false, but it's politically incorrect to be judgmental. It's probably a big surprise to these kids when they get to the world of work and find that their performance will be judged."
While society has lowered its performance standards, Scott said, businesses are being held to higher expectations, including government regulations on workplace safety, environmental rules and employee relations, with what he called a "gotcha" mentality among regulators.
Today's business leaders should continue hiring people with integrity, he said.
"Perhaps I'm wrong and it's not more difficult than in the past. But I know that if you begin with people of integrity, the rest of your job will be easier. ... If you're dealing with a scoundrel, no contract can offer enough protection."
He said he thinks the Midwest has more people with high ethical standards than other parts of the United States or the world. Yet even businesses in Omaha can't assume that an ethical culture will automatically continue, he said.
"Any business organization is only one generation away from losing its ethical moorings," Scott said, citing the financial scandal and collapse of Enron Corp., formerly a well-respected Omaha company known as InterNorth Inc.
He said a business operated by people of high character will admit a mistake, resolve the issue and make sure it doesn't happen again.
"Problems that are swept under the rug and ignored or those that are covered up, they will come back to haunt us," Scott said. "... Making money is really just a byproduct of conducting the most important part of your business properly, that of developing talented people to run the business."
While it's important for a business to adopt and articulate high ethical standards, he said, "the effort only pays off if we have people of integrity operating within those standards."
Contact the writer:
402-444-1080, steve.jordon@owh.com
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