For those who have been following the Paul Wolfowitz scandal concerning a breach of ethics stemming from the World Bank promotion of his girlfriend, Shaha Riza, it is getting close to decision-making time for the organization’s board. On Wednesday last week, United Press International reported that the board’s decision on Wolfowitz’s future with the organization is expected this week.
Some background for those unfamiliar with this story: Wolfowitz, former deputy secretary of defense under President George W. Bush, became president of the World Bank, a Washington, DC-based international institution dedicated to reducing global poverty, in June 2005. He made headlines with his pledge to curtail the high level of corruption in the governments of poor countries, calling it the biggest barrier to their development.
Just prior to assuming leadership of the organization, he acknowledged his relationship with Riza, who joined the World Bank in 1997 and rose through the ranks to become senior communications officer. The organization’s Ethics Committee pointed out that their relationship went against its rule banning personal relationships between bank employees. Wolfowitz initially suggested he recuse himself from all professional dealings with Riza, but the Ethics Committee said that wasn’t good enough, and it advised instead an “in situ promotion,” according to a July 2007 memo by the committee. Wolfowitz agreed to this, but the settlement he put together included a transfer to the State Department with a tax-free six-figure salary and an automatic annual pay raise.
In late March, The Washington Post reported that Riza’s salary increased tax-exempt by more than $60,000, which spurred an avalanche of bad press for the World Bank. In late April the San Francisco Chronicle reported that the bank’s employees were severely disrupted by the upheaval; in staff meetings addressing the matter, workers at various levels spoke out demanding that Wolfowitz resign.
Does an employee uprising against a public figure in a large organization sound familiar? It should – a similar but in many ways very different scenario played out in April at both NBC News/MSNBC and CBS. I’m speaking, of course, of Don Imus’ termination from both news organizations for his uncouth reference to the Rutgers University women’s basketball team, which we won’t do the disservice of repeating here.
The most important and compelling occurrence to emerge between when Imus uttered his controversial comments on April 4 and when NBC News President Steve Capus announced a week later on April 11 that MSNBC would no longer simulcast Imus in the Morning was Capus’ justification for the talk show host’s termination:
These comments were deeply hurtful to many, many people. And we’ve had any number of employee conversations, discussions, emails, phone calls. And when you listen to the passion and the people who come to the conclusion that there should not be any room for this sort of conversation and dialogue on our air, it was the only decision we could reach.
One could make the argument that the departure of key sponsors of the simulcast the same day weighed into NBC News’ decision. Still, the show had a large enough following and enough revenue from the remaining sponsors to continue to air if the organization’s leadership thought that were the best course of action.
To be clear, this decision, like the one the World Bank’s board is now pondering, comes down to ethical leadership and the extent to which employees will follow a company’s public figures down the “wrong path.” In the case of NBC News, hundreds of employees made their opinions on how Imus’ comments impacted the ethics and values of the business known.
Both Wolfowitz and Imus have become national media stories – one centered on politics, poverty reduction and international diplomacy; the other on race relations, gender issues and free speech. But we see them as more. We see them also as workplace issues – issues played out before an audience in size inconceivable to most small business owners and leaders, perhaps, but workplace issues nonetheless.
What can we learn? Simply, when leaders behave inconsistently with organizations’ mission and values, employees react, speak out, lose confidence, become less motivated, more distracted and can’t do their best work. Organizational performance suffers. So the workplace lessons to be learned from Wolfowitz and Imus are serious red flags.
Leaders and representatives of enterprises of all sizes need to consider their actions carefully in terms of ethics and take swift action when conflicts arise to avoid adversely affecting the attitudes of their workforce. In extreme cases, people may leave the business, believing it no longer aligns with the values they identified with when they were hired.
Given that the cost of replacing an employee can range from 50 percent to 150 percent of his or her salary, it is in leaders’ best interest to do their best to hold themselves up to the ethical standards of the organization at all times in order to keep employee tenure, morale and productivity consistently high.