Does tone at the top matter? What happens if a CEO is willing to overlook illegal activity to create more business? If he does it once, will he do so again or even have a propensity to do so again? The Man From FCPA is from Houston, where the example of long-deceased Enron is never far from anyone’s mind. The CEO was so corrupt that his spirit was imbued within the senior leadership ranks where an entire level of management went to jail for accounting fraud, leading in part to the passage of the Sarbanes-Oxley Act. The symbol of Enron, the now-infamous Crooked E turned out to the be the right representation for the company.
While his conduct does yet rise to that of the deceased CEO of Enron Ken Lay, one can only wonder about the where the conduct and attitudes of Uber CEO Travis Kalanick will lead the company. In one of the most scathing pieces on a sitting CEO recently seen in the New York Times, it detailed a culture of not just win at all costs, but one of routinely violating norms of business. The piece centered around a meeting between Kalanick and Apple CEO Tim Cook where Cook made clear that Apple was aware Uber had engaged in an action called “data bridging” by surreptitiously geo-tagging iPhones so that each phone would have a unique fingerprint. Uber tried to hide this conduct by “geofencing” this tactic around Apple’s corporate headquarters. Cook made clear to Kalanick the fingerprinting of iPhones violated the terms of service and had to stop.
Did Kalanick know about the fingerprinting of iPhones? Did he know about the company’s Greystroke program created to ring fence out regulators from obtaining rides on Uber? Or did he simply create the culture which allowed these programs to be developed and utilized by the company until they were publicly called out for using them? Whatever the answer might be, it is clear a win-at-all-costs culture permeates the company, which one day could give employees the idea to step over the line from violation of contract terms to violations of law.
It apparently was an easy step for multiple executives at Enron.