Status Quo – What are you hiding really?

Screen Shot 2016-02-05 at 10.38.36 AMI recently connected with an old school friend, not just any friend but one of those friends who has done extremely well for themselves – built what looks like a great career and what most would judge as a financial success (luxury homes, the cars to match and children at private schools).

The story begins when I was asked to pick him up at the airport … I arrived on time and was ready to meet him in the arrivals hall. He recognised me immediately and greeted me in the same way he did in high school, we exchanged a few more pleasantries and made our way to my car.

In the car his first comment was ‘Rich, you do a lot of Social Media don’t you?’ To which I replied ‘yes’. He immediately responded by saying he could never do that. I have learnt to never respond to statements like that, because inherently I know that when people make statements like that, it is normally because they are hiding something (even when they are not sure of what they are actually hiding or have never thought about what they are intending to hide) – this is human behaviour and this story is about to reveal why some people can never participate in social media.

Later that day I met him for dinner and he proceeded to tell me how well he was doing for himself and the lifestyle that his six figure income afforded him and his family. He mentioned companies that he had worked for and how he had climbed the corporate ladder, becoming one of the top professionals in his sector of the financial services industry. He also told me how he had become the top industry whistle blower, how respected he was and how he is chairperson of many ethics committees in his industry.

Ethics is knowing the difference between what you have a right to do and what is right to do.” – Potter Stewart

Then he mentioned his existing company and how this company had been sold prior to the financial crisis in 2008. At that stage the company was showing a huge loss and was sold for a few dollars and formed part of the government bailout. Anyway, the long story short is that this company was valued at over $1 billion dollars last year; he received a bonus of more than 50% his annual salary, his immediate director received a bonus of 100% his annual salary, and the CEO/founder received 400% his annual remuneration as a bonus. I thought that was amazing and I responded by saying ‘Wow, that is truly amazing, what a turnaround, so tell me how did the shareholders do?’…. There was a moment’s silence and he looked at me as if I was an alien, composed himself and without thinking said ‘Well, that is actually criminal’. I was flabbergasted and quickly changed the subject so that he would not feel too uncomfortable.

Over a few glasses of wine he shared a situation which occurred in the boardroom a few months ago when the chief actuary of the company was asked to give a projection on a proposed new insurance product. When the actuary presented his figures, the CEO and chief marketing officer responded by telling the actuary to ‘sharpen his pencil’ as those kind of returns would never sell in the market. They were too low and needed to be at least 3-5% higher to sell in the insurance marketplace. The actuary responded saying that he can assure them that his figures are accurate and that they have been verified by his team. The CEO then instructed the actuary to change the figures, basically telling the actuary that if they can’t sell the product, how does he expect to be paid. I asked my friend about this stance from a financial aspect and he said that as long as his signature does not appear on any documentation he would be okay. I then asked how he intended to get that right and he said that in situations like this, urgency is paramount and if he delayed slightly he was sure his director would sign to get the proposal passed quickly, this freeing my friend from any immediate responsibility.

I continued to spend time with this old friend (I was intrigued and I needed to understand how this corporate animal functioned). During the next few days I asked more than a few questions, trying to get some insight into the world of the financial industry. When our time was nearing the end I needed to ask him one question, a question that would change my perspective on greed and allow me to understand how we as humans will try and justify everything we do.

The question was as follows: ‘My friend, I have heard many things over the past few days and I need to know one thing … Please tell me how you manage to align what the company you work for does, and how you as an individual with ethics justifies this?’ His response was that he is simply doing this as a career move and that he is expecting his director to give him a pay rise of over 40% for the excellent work he and his department are doing with the company finances. He then mentioned that he had also realised that he would need to move from this company in the next two to three years. I asked why he thought that would be necessary. His response was simple – he did not want to go to jail with the rest of the company directors.

I asked him why he thought this might happen. ‘Well, it’s relatively simple,’ he explained, ‘It’s not like the last time the company lost money. That was shareholders’ money, and we all know shareholders understand the risk they are taking when they invest. This time it was the government bailout money, therefore it is taxpayer money, and the consequences will be more severe and the directors are less likely to walk free.’

The Status Quo exists and what we expect to be normal is not what is normal business. Will the Status Quo be challenged or will the financial industry continue to hide their greed and mistakes at the expense of the average man in the street?

Photo credit: Russ Allison Loar via Foter.com / CC BY-NC-ND

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About RichSimmondsZA

Father | Professional Speaker | Top 50 International & Forbes Top 10 African Social Influencer | RuleBreaker and ChangeMaker | Author 5 Night Plan & MugAndTweet Books
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