Public Image 1, Reality 0
Merrill Lynch (now part of Bank of America) understood the value of reputation. As a financial services company providing advice to clients as to the placement of their investments, dependent as it is on the fees arising from that advice and related transactions, reputation is everything.
Reputation is founded in the squishy intangibles of trust, ethics, good governance and conduct. The old Merrill Lynch knew a lot about the value of these qualities, as they were often accused of not having any by their employees. Most ultimately ex-employees…
Merrill Lynch had a very large legal department and well-oiled public relations machine that they brought to bear regularly to shut-down errant ex-employees and their flapping gums. Much money changed hands to buy the silence of such employees. Perhaps it was just the price they were prepared to pay.
There appears to be a formula that they followed when an employee filed a formal complaint with corporate head office about the conduct of a specific manager or office, regardless of whether that was before they were fired or resigned or after. Act early, go hard, whatever it takes. It was a successful MO. It kept them out of court and out of the press, and squeaky clean in the minds of their unaware clients.
And if they ever did get dragged to court, I expect they would merely point to the highly legalistic policies and procedures manual that forbade the mere thought of wrong doing. But it was – for me at least – a poisonous discriminatory culture that encouraged managers to do whatever they could get away with.
As a junior stockbroker in one of the many Chicago offices of Merrill Lynch in 1993, I was profoundly disappointed by the unethical and at times, outright illegal behaviour of my manager. We were destined to never get along. Things took a turn for the worse based upon my unfortunate happenstance of gender and we parted ways, whereupon I came to be on a first name basis with several lawyers employed in head office.
Having previously been impressed with the Merrill Lynch corporate reputation, the fact that the reality was so far removed from the glossy public image shocked me. I soon learned how it came to be so, and how aggressively it was massaged and defended from a legal standpoint.
George Lenard, US employment lawyer, says that “if there seems to be a disconnect between what a company preaches in harassment and Equal Employment Opportunity Commission (EEOC) training sessions and what it appears to practice in the day-to-day workplace, chances are the wagons will circle tightly around company policy as soon as someone complains, with the ‘do as I tell you, not as I do’ crowd firmly reasserting command.”
If the investing, buying and supplying public were fully informed of the reality of the culture of some of our most respected global brands, their purchasing and investment habits may well be different.
The statistics that follow may shock you. They should. In all cases, the statistics below are for employees in the United States only; for one year only; for cases that the EEOC investigated and deemed to meet legal criteria warranting charges; do not include monetary benefits obtained through litigation, nor settlements that occurred external to the EEOC.
In Fiscal Year 2008, EEOC received:
More revealing perhaps would be the statistics with regard to the number of charges “voluntarily” withdrawn by complainants or settled outside of the EEOC’s log of claims.
All of these charges and recoveries reported by the EEOC were from companies you know and respect, in which you might be an investor and from which you might buy. Perhaps even with which you work. They may all claim to have policies and procedures and training, but their culture tells another story. As does their sometimes unsuccessful defence of the charges brought against them.
While such statistics are not so freely available for other countries, discrimination and bad behaviour is hardly confined to the United States. One could argue the American record on workplace discrimination is better than most, given the laws of the United States.
So what do you know about your investment choices? Do you ever ask at an AGM, how many discrimination or regulatory cases have been brought and fought and lost? Or simply bought?
Does it matter?
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Category: Reputation Management, Sin & Spin
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