Capitalism extends far beyond maximizing profits John Brennan, CEO and chairman of Vanguard Group, said at Monday's lecture titled "The Market Value of Integrity."
Brennan spoke to an audience of business school students and professors in Jordan Auditorium. He stressed the connection between corporate responsibility and ethics and asserted that character was, above all, the most important characteristic in a CEO, even surpassing confidence.
Citing the corporate scandals of the last 10 years involving Enron, Worldcom and Tyco, Brennan demonstrated the drastic psychological effects of corruption - emphasizing the overwhelming feeling of "what a terrible place to be" felt by those who viewed American corporate society as corrupt and immoral.
"All business evil stems from ego or greed," Brennan said. "The fact of the matter is greed corrupts and greed is not good in the business world."
But the overwhelming majority of businesses and corporations in the United States are operated by good and capable people, he said. The feeling of disillusionment with corporate America is nothing more than "a bias spurred on by a few terrible cases of corruption," Brennan said.
"We have to have high standards companies or [business] doesn't work," he said.
Action in the business place was another point heavily emphasized by Brennan, who felt that all employees of a company are obligated to maintain a degree of responsibility and honesty.
"Defining an organization's character is what goes on everyday," Brennan said.
When asked about his own company, Brennan said that Vanguard dealt with companies that had a history of corruption only if those companies dealt with the issue quickly and overcame it. Vanguard, Brennan said, had a higher degree of ethics to maintain than most other companies due to its dealings with the savings and investments of individual people.
"Those firms' sloppy ethics affected my clients' financial futures," he said. "The defining character is how people act in the everyday."
While he admitted there will always be companies that "go over the edge" and that a degree of government regulation over business will always be necessary, Brennan stressed his belief in the overwhelming amount of honest leaders present in capitalistic enterprises in the United States
The lecture was sponsored by the John A. Berges Endowment and is part of the Berges Lecture Series in Business Ethics.
