Unethical Leaders

Tayler Thelen, Eric Henderson, Grace Howrigon, Chavon

Watts, Crystal Wilcoxen
Siena Heights University

What are Ethics?

Separating right from wrong
Accepted guidelines of behavior
Morals
Individuals determination of right and wrong
Determined by an individuals values

Ethics: The center of leadership

(Dubrin, 2010)

Five Ethical Leadership Behaviors

1.Be honest, trustworthy, and have integrity in dealing with others
2.Pay attention to all stakeholders
3.Build community
4.Respect the individual
5.Accomplish silent victories
(DuBrin, 2010)

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)
deepgreenpermacultur

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)

Timeline
1961: Barnard College; double major in history
and architectural history
1967: Stockbroker
1976: Catering Business; in only 10 years became
$1 million enterprise

1997: Purchased all of publishing, broadcasting,

merchandising and licensing ventures bearing
her name and consolidated into a new company:
Martha Stewart LIving Omnimedia (MSLO)

1982: First book; Martha Stewarts Entertaining

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

1990: First magazine and Editor In Chief; Martha

Stewart Living

2001: Ladies Home Journal named Stewart the

third most powerful woman in America

1993: Weekly half hour TV show; Martha Stewart

Living

2002: Magazine Martha Stewart Living was

selling more than 2 million copies per issue

1993: Second magazine; Martha Stewart

Weddings
1995: Signed an advertising and consulting
contract with Kmart for $5 million

(Martha Stewart Biography -- Academy of Achievement, 2010)

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

What Happened to Martha Stewart?

A.Sentenced to two years in prison followed by two years of probation
B.Charged with embezzlement and sent to a minimum security prison
for a year
C.Sentenced to five months in prison and $30,000 fine
D.$75,000 fine with no consequences

What Happened to Martha Stewart?

A.Sentenced to two years in prison followed by two years of probation
B.Charged with embezzlement and sent to a minimum security prison
for a year
C.Sentenced to five months in prison and $30,000 fine
D.$75,000 fine with no consequences

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
MSLOs share price fell, TV program cancelled, companys losses
mounted

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

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)

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.)

Hollinger International
Publically listed company on the New York Stock Exchange
Once the worlds 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)

What Happened to Conrad Black?

A.Case was brought to the Supreme Court and later settled, resulting
in $10 million in fines and no prison time
B.Sentenced to 6 years in federal prison and ordered to pay Hollinger
International $6 million
C.Case was brought to the U.S. District Court in Chicago but resulted
in no conviction because of a lack of evidence
D.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

What Happened to Conrad Black?

A.Case was brought to the Supreme Court and later settled, resulting
in $10 million in fines and no prison time
B.Sentenced to 6 years in federal prison and ordered to pay Hollinger
International $6 million
C.Case was brought to the U.S. District Court in Chicago but resulted
in no conviction because of a lack of evidence
D.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

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

Tyco Scandal
Misappropriation
$400 Million +
22 Felonies

What happened to Dennis Kozlowski?

A.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.

What happened to Dennis Kozlowski?

A.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

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

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)

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

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)

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
2000present: 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)

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)

What Happened to Chung Mong-Koo?

A. Sentenced to 5 years in prison, and was fined $5
million for embezzlement charges
B. Sentenced to 6 months minimum security prison
for fraud
C. Received full pardon from South Korean President
Lee Myung Bak
D. Sentenced to 1 year in prison, and was fined $50
million

What Happened to Chung Mong-Koo?

A. Sentenced to 5 years in prison, and was fined $5
million for embezzlement charges
B. Sentenced to 6 months minimum security prison
for fraud
C. Received full pardon from South Korean President
Lee Myung Bak
D. Sentenced to 1 year in prison, and was fined $50
million

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)

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 pardon from South Korean President Lee Myung
Bak
(Tharoor, 2010), (Reuters.com,
2007)

What do you think?

Martha Stewart
Conrad Black
Dennis Kozlowski
Chung Mong-Koo

Conclusion
Conrad Black
Dennis Kozlowski
Chung Mong-Koo
Martha Stewart

paigntonacademy.o
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