On Tuesday, March 3, 2015, the Zicklin Graduate Accounting Society (ZGAS) had the privilege of hosting Mr. Lawrence Zicklin in “The Man Behind the Namesake: Mr. Lawrence Zicklin on Business Ethics and Corporate Integrity,” in which Mr. Zicklin led a thoughtful and highly informative discussion.
Mr. Zicklin graduated from Baruch College with a Bachelor of Business Administration degree and earned a Masters of Business Administration degree from the Wharton School at the University of Pennsylvania. Mr. Zicklin is a philanthropist who has generously donated $18 million to Baruch’s Zicklin School of Business and also endowed the school with a $2 million fund for the Robert Zicklin Center for Corporate Integrity. Throughout his career, Mr. Zicklin has been a true believer in ethical business practices.
During his presentation, Mr. Zicklin discussed his background, recent changes to the business world, the ethical dilemmas facing first-year accountants and lawyers, as well as the invaluableness of one’s reputation. Following Mr. Zicklin’s presentation, Vera Wang, President of ZGAS, moderated an audience Q&A session.
Some highlights of the presentation were:
As a professor at New York University, Mr. Zicklin focuses on teaching about “sensitivity.” He teaches on “grey areas,” where right or wrong cannot be easily defined, and in which judgment comes into play. Mr. Zicklin stated that a single bad judgment can cost one his/her career; “Once you get things wrong, it’s very hard to get them right.” Students have to grow fast, and learn about judgment in the classroom, as well as from internships. He advised students not to compromise too much when facing unethical situations in the workplace because “such errors can seriously shorten your career.”
There was a broad discussion on the many challenges Millennials (ages 18-29) face upon entering the business world. Mr. Zicklin pointed out several major changes that have now made the business world more difficult than ever:
· Technology and social media have created a world that is virtually without secrets. With information widely available and analyzable worldwide, the way organizations and individuals interact are dramatically affected. A world without secrets requires students to behave as if everything is public every single moment.
· Globalization has made the business world a smaller and more complex place, since diverse economies and cultures affect how business is conducted. The factors at play include faster communication via the Internet, worldwide competition and harmonization of business standards and practices. One must take into account all such variables when conducting business.
· More and more companies face intense regulatory pressures. Mr. Zicklin mentioned that his business now spends more on regulation than new business. Investment in compliance with legal and regulatory standards is crucial to stay ahead of the game.
Mr. Zicklin then discussed the increasing importance of reputation management, which can be broadly applied to both individuals and corporations. Management has to consider corporate responsibility when it comes to goods, investments and employment. Mr. Zicklin compared Goldman Sachs and Citigroup in their practices of maintaining business integrity and their reputations. In 2006, Goldman Sachs saw problems in the mortgage market and predicted things were beginning to take a wrong turn. Thus, it painfully decided to cut back its inventory which ate into huge profits, but in return, it maintained its place during the financial crisis. On the other hand, Citigroup, tempted by huge profits felt, “as long as the music is playing, we are going to stand up and dance.” They played so hard that they required a bailout by the US government. Citigroup also had to embark upon the long journey of reestablishing its reputation because “reputation is everything. Reputation follows you closely as you go so make sure wherever you work, there’s an excellent corporate culture.”
Mr. Zicklin has been a role model in the strategic leadership of ethical behavior within the business world. He has developed a healthy relationship with his employees and established lines of defense for effective internal control. “Keep your doors open for employees to report any issues they have discovered, as this can save your life.” He is grateful that his employees have faith in his company’s management and bring up issues without hesitation.
We hope this brief overview has piqued your interest in business ethics and corporate integrity, as well as provided you with the notion that such issues are the foundation upon which the business world is built.