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Deere CEO speaks at Berges Lecture Series

Steve Kerins | Thursday, September 28, 2006

In today’s corporate climate, it’s the task of company leaders to develop, implement and maintain their organizations’ commitment to ethical practices, a business executive said Wednesday.

Robert W. Lane, chairman and chief executive officer of Deere and Company, delivered the third lecture in this year’s Berges Lecture Series, which addresses issues of ethics in business.

Lane devoted a large portion of his presentation – which was entitled “No Smoke, No Mirrors: Straight Down the Middle” – to outlining the role of business leaders both in promoting an ethical culture within their own companies and in restoring public faith in business.

“Frankly, these recent situations in the United States are very … disappointing,” Lane said, referring to the wave of scandals that has hit American business in recent years.

The loss of public trust in business has generated certain trends, Lane said.

In a company not known for ethical practices, “potential employees might think that there are no rules, that anything goes,” he said.

Acknowledging growing concerns over the long-term security of American jobs in the face of globalization, and the obstacles these might cause for the future of corporate ethics, Lane downplayed the role of outsourcing in recent changes in the economy. He said that outsourcing accounted for “less than two percent” of job loss, and that workers’ wages constitute the same portion of annual GDP that they did 50 years ago.

Lane spoke about the place of ethics in an increasingly global business environment, a theme that has appeared in each of the Berges lectures this year.

“Much of John Deere’s growth in the 21st century will come from countries [whose] laws are very different [from those in the U.S.],” he said. Lane argued that, because of “inevitable” trends in globalization, many companies will face challenges in upholding their codes of ethics abroad.

Based on these realities, “it is essential that businesses work responsibly with legislatures to develop and enact … public policies,” he said.

Lane also addressed the Sarbanes-Oxley Act of 2002 and similar recent legislation on corporate ethics, another common topic in this year’s Berges lectures.

“[Sarbanes-Oxley] has transformed procedures and responsibilities [in] almost every aspect of organizations,” he said. “[It] is a price that U.S. business is paying to restore investor trust.”

Although high profile scandals have kept the public on edge, Lane said it is important that investors and consumers know that most companies “have been vigilant for a very long time” in matters of business ethics.

“Somehow the word needs to get out that most businesses are run by people of high integrity,” he said, arguing that the current situation in corporate ethics is “not as bleak” as it might seem.

Throughout the lecture, Lane cited the importance of ethical leadership in business.

As the chief executive of John Deere, “I must be a steward of this business and personally accountable for its legacy,” he said. “After we have exhausted all [possibilities] to win business legitimately, we will walk away.”

The goals of corporate ethics, Lane said, don’t need to conflict with those of productivity, profit and expansion. As an example, he cited John Deere’s stated commitment to “integrity with performance.” John Deere employs 47,000 employees in more than 100 countries and has been a mainstay in the production of agricultural machinery for more than 150 years.

The Berges Lecture Series is sponsored by Notre Dame’s Center for Ethics and Religious Values in Business and the Institute for Ethical Business Worldwide. The next lecture in the series will be entitled “Leadership and Ethics” and will take place Nov. 1.