1 / 34

Ethical Leadership: Martha Stewart vs. Conrad Black

Explore the contrasting ethical behaviors of Martha Stewart and Conrad Black in their respective business careers, shedding light on the consequences and aftermath.

dbenjamin
Download Presentation

Ethical Leadership: Martha Stewart vs. Conrad Black

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Unethical Leaders Tayler Thelen, Eric Henderson, Grace Howrigon, Chavon Watts, Crystal Wilcoxen Siena Heights University

  2. What are Ethics? • Separating right from wrong • Accepted guidelines of behavior • Morals • Individual’s determination of right and wrong • Determined by an individual’s values • Ethics: The center of leadership (Dubrin, 2010)

  3. Five Ethical Leadership Behaviors • Be honest, trustworthy, and have integrity in dealing with others • Pay attention to all stakeholders • Build community • Respect the individual • Accomplish silent victories (DuBrin, 2010)

  4. Evaluating Ethical Decisions • Is it right? • Is it fair? • Who gets hurt? • Would you be comfortable if the actions/information was made public? • Would you tell your child, sibling, or young relative to do it? • Is it a good idea? (DuBrin, 2010) deepgreenpermaculture.com

  5. Martha Stewart • Born August 3, 1941 • Raised in Nutley, NJ • Barnard College • History and Architectural History • American Entrepreneur • Domestic Lifestyle Innovator • Cooking, sewing, entertaining, decorating, housekeeping, gardening (“Martha Stewart”, 2015)

  6. Timeline 1961: Barnard College; double major in history and architectural history 1967: Stockbroker 1976: Catering Business; in only 10 years became $1 million enterprise 1982: First book; Martha Stewart’s Entertaining 1990: First magazine and Editor In Chief; Martha Stewart Living 1993: Weekly half hour TV show; Martha Stewart Living 1993: Second magazine; Martha Stewart Weddings 1995: Signed an advertising and consulting contract with Kmart for $5 million 1997: Purchased all of publishing, broadcasting, merchandising and licensing ventures bearing her name and consolidated into a new company: Martha Stewart LIving Omnimedia (MSLO) 1999: MSLO went public; share price more than doubled on first day of trading. Stewart retained most of shares in her company; served as Chairman, President and CEO 2001: Ladies Home Journal named Stewart the third most powerful woman in America 2002: Magazine Martha Stewart Living was selling more than 2 million copies per issue (“Martha Stewart Biography -- Academy of Achievement”, 2010)

  7. Crime • ImClone insider trading affair • 4,000 shares • Dec. 27, 2001 - Unlawful tip; Stockbroker, Peter Bacanovic • Sold stock • Dec. 28, 2001 - ImClone (biopharmaceutical company) announced FDA did not accept Erbitux • Stock dropped 16% • Avoided $45,673 loss • Forbes - Net worth $700 million (“Martha Stewart”, 2015) (Leite, 2012)

  8. What Happened to Martha Stewart? • Sentenced to two years in prison followed by two years of probation • Charged with embezzlement and sent to a minimum security prison for a year • Sentenced to five months in prison and $30,000 fine • $75,000 fine with no consequences

  9. What Happened to Martha Stewart? • Sentenced to two years in prison followed by two years of probation • Charged with embezzlement and sent to a minimum security prison for a year • Sentenced to five months in prison and $30,000 fine • $75,000 fine with no consequences

  10. Aftermath • 2004 Sentenced and charged - ImClone insider trading affair • Guilty - Four counts of obstructing justice and lying to investigators • Sentenced to a five month prison sentence and $30,000 fine • Five months house arrest and two years of probation • MSLO’s share price fell, TV program cancelled, company’s losses mounted (“Martha Stewart”, 2015) (Leite, 2012)

  11. Present Day Martha • Released - March 4, 2005 • Rebuilding • New TV show: The Martha Stewart Show • Nominated for six daytime Emmy Awards • Weekly call-in show on Sirius satellite radio network • New books: The Martha Rules, The Martha Stewart Baking Handbook, Homekeeping Handbook • Appearances on The Today Show • Within 1 year of release, MSLO returned to profitability • $300 million (“Martha Stewart Biography -- Academy of Achievement”, 2010)

  12. Conrad Black • Born August 25, 1944 in Montreal, Canada • Came from a wealthy family • Education: • Carleton University (BA) • Universite Laval (LL.L.) • McGill University (M.A.) • Married with three kids • Later divorced and remarried (“Biography of Conrad Black”, n.d.) (Rogers, 2012)

  13. Business Career • Involved in numerous businesses • Mainly publishing newspapers • 1978, paid $30 million to acquire Ravelston Corporation • Accusations arose that Black had taken advantage of the widows of Ravelston Directors • 1981, acquired an Ohio-based mining company • Charged by SEC with filing misleading public statements • Charges were later withdrawn • 1984, withdrew $56 million from Dominion workers’ pension plan • Case went to supreme court, later settled in equal shares (“Biography of Conrad Black”, n.d.)

  14. Hollinger International • Publically listed company on the New York Stock Exchange • Once the world’s third-largest English language newspaper empire • Published The Daily Telegraph (UK), Chicago Sun Times (U.S.), The Jerusalem Post (Israel), and the National Post (Canada) • CEO: Conrad Black • Estimated that $80 million in assets improperly taken or inappropriately spent by Black from 1997-2003 • Divested company assets held by Hollinger, which Black knew were in decline • Misled investors (“Biography of Conrad Black”, n.d.) (Shaoul, 2004)

  15. What Happened to Conrad Black? • Case was brought to the Supreme Court and later settled, resulting in $10 million in fines and no prison time • Sentenced to 6 years in federal prison and ordered to pay Hollinger International $6 million • Case was brought to the U.S. District Court in Chicago but resulted in no conviction because of a “lack of evidence” • Conrad Black pleaded guilty to one count of obstruction of justice as part of a deal structured for him to provide the defense with proof of fraud from other board of directors within his companies

  16. What Happened to Conrad Black? • Case was brought to the Supreme Court and later settled, resulting in $10 million in fines and no prison time • Sentenced to 6 years in federal prison and ordered to pay Hollinger International $6 million • Case was brought to the U.S. District Court in Chicago but resulted in no conviction because of a “lack of evidence” • Conrad Black pleaded guilty to one count of obstruction of justice as part of a deal structured for him to provide the defense with proof of fraud from other board of directors within his companies

  17. Dennis Kozlowski - Background • Born: November 16, 1946 • Newark, New Jersey • Seton Hall University, 1968 • 1970 auditing job in New York City with SCM corporation • 1975 joined Tyco • CEO 1992

  18. Tyco Scandal • Misappropriation • $400 Million + • 22 Felonies

  19. What happened to Dennis Kozlowski? • He was sentenced to 1 year and told to pay $100 million in fines B. Sentenced to 15 years in a minimum security prison C. Sentenced to 8 year and 4 month sentence and fined $70 Million D. All of his charges were turned into misdemeanors.

  20. What happened to Dennis Kozlowski? • He was sentenced to 1 year and told to pay $100 million in fines B. Sentenced to 15 years in a minimum security prison C. Sentenced to 8 year and 4 month sentence and fined $70 Million D. All of his charges were turned into misdemeanors

  21. Leadership Style • No need for consulting bosses • Performance-based compensation • Failed to train new generation executives (“Former President”, 2015)

  22. Aftermath • 8 year and 4 month prison term • $134 Million • $70 Million in fines • Paroled to find and keep a job • Software company clerk (Schorn, 2007)

  23. Chung Mong-Koo Chairman & CEO of Hyundai Motor Co. & Kia Motors Corp.

  24. Background Birthdate 1938: Born in Gangwon Province, South Korea Education •1967: Graduated from Hanyang University with a B.S. in Industrial Engineering •PhD: Central Connecticut State University, National University of Mongolia, and Mongol National University (Healy, T., & Nakarmi/Seoul, L., 2000), (Reuters.com, 2007)

  25. Background Cont. 1970: Director at Hyundai Motor in Seoul, South Korea 1974: CEO of Hyundai Motor Service 1977: CEO of Hyundai Precision & Industry 1981: CEO of Hyundai Pipe 1986: CEO of Inchon Iron & Steel and CEO of apartment builder Hyundai Industrial Development & Construction 1991: Informally merges the above companies into a group within Hyundai called "MK Group" 1996: Chairman of Hyundai Group (However his father Chung Ju Yung is the honorary chairman and has real control) 1998: CEO Hyundai Motor 2000–present: Chairman & CEO of Hyundai Motor Co. & Kia Motors Corp. 2008-Present: Chairman, Chief Executive Officer and member of the External Director Candidates Recommendation Committee (Reuters.com, 2007)

  26. White-Collar Crime March 26, 2006: Prosecutors raid Hyundai Group units over suspected illegal political lobbying (setting up slush funds to bribe political officials) •Roughly embezzled $110 million US dollars April 19, 2006: Hyundai Motor says the Chung family will donate $1 billion dollars in shares of the group's auto shipping affiliate Glovis Co. Ltd. to make up for political lobbying scandal (Reuters.com, 2007)

  27. What Happened to Chung Mong-Koo? • Sentenced to 5 years in prison, and was fined $5 million for embezzlement charges • Sentenced to 6 months minimum security prison for fraud • Received full pardon from South Korean President Lee Myung Bak • Sentenced to 1 year in prison, and was fined $50 million

  28. What Happened to Chung Mong-Koo? • Sentenced to 5 years in prison, and was fined $5 million for embezzlement charges • Sentenced to 6 months minimum security prison for fraud • Received full pardon from South Korean President Lee Myung Bak • Sentenced to 1 year in prison, and was fined $50 million

  29. Embezzlement Consequences April 28, 2006: Chung is arrested on charges of misusing company funds May 16, 2006: Chung is charged with breach of trust and embezzling 103.4 billion won (~$110 million dollars) in company funds to set up a slush fund to bribe officials June 28, 2006: Chung is released on $1 million dollar bail January 16, 2007: Prosecutors demand a six-year jail term for Chung (Reuters.com, 2007)

  30. Embezzlement Consequences Cont. February 5, 2007: Chung is found guilty of breach of trust and embezzling company funds and sentenced to three years in jail February 12, 2007: Prosecutors and Chung appeal the three-year jail sentence June 19, 2007: Prosecutors seek to double the jail sentence for Chung to 6 years September 6, 2007: South Korea's appeals court upholds the lower court conviction and hands Chung a 3-year jail term suspended for 5 years 2008: Received full pardonfrom South Korean President Lee Myung Bak (Tharoor, 2010), (Reuters.com, 2007)

  31. What do you think? • Martha Stewart • Conrad Black • Dennis Kozlowski • Chung Mong-Koo

  32. Conclusion • Conrad Black • Dennis Kozlowski • Chung Mong-Koo • Martha Stewart paigntonacademy.org

  33. References Advameg Incorporated. (2015). Retrieved from http://www.referenceforbusiness.com/biography/F-L/Kozlowski-Dennis-1946.html Biography of Conrad Black. (n.d.). Retrieved October 22, 2015. from http://www.financialpost.com/story.html?id=ff18a624-c20b-481c-ab6b-822b4111258c DuBrin, A. (2010). Leadership: Research findings, practice, and skills. Mason, Ohio: Cengage Learning. Martha Stewart. (2015). In Encyclopædia Britannica. Retrieved fromhttp://www.britannica.com/biography/Martha-Stewart Leite, Julia. (2012). What Martha Stewart Did Wrong. Retrieved from http://coveringbusiness.com/2012/05/15/what-martha-stewart-did-wrong/. Martha Stewart Biography -- Academy of Achievement. (2010). Retrieved October 20, 2015, from http://www.achievement.org/autodoc/page/ste0bio-1 Rogers, A. (2012, August 14). 13 Mugshots Of Business Leaders Who Landed On The Wrong Side Of The Law. Retrieved October 23, 2015, from http://www.businessinsider.com.au/mugshots-of-business-and-finance-leaders-2012-8#former-mckinsey-and-co-executive-rajat-gupta-was-convicted-in-june-of-passing-tips-to-the-infamous-raj-rajaratnam-1 Shaoul, J. (2004, September 16). World Socialist Web Site. Retrieved October 23, 2015, from https://www.wsws.org/en/articles/2004/09/holl-s16.html Schorn, Daniel. (2007). Dennis kozlowski: Prisoner 05A4820. Retrieved from http://www.cbsnews.com/news/dennis-kozlowski-prisoner-05a4820/3/ Healy, T., & Nakarmi/Seoul, L. (2000). A novice at the wheel: Dynastic lineage defeats experience at hyundai. Asiaweek.com Magazine. Retrieved from: http://edition.cnn.com/ASIANOW/asiaweek/99/0319/biz5.html Reuters.com (2007). Timeline: Milestones in the hyundai chairman fraud case. Reuters. Retrieved from: http://www.reuters.com/article/2007/09/06/us-hyundai-chairman-idUSSEO26689220070906?mod=related&channelName=ousivMolt Tharoor, I. (2010). Chung mong koo, Hyundai motor. Time. Retrieved from: http://content.time.com/time/specials/packages/article/0,28804,2009445_2009447_2009523,00.html

More Related