Saturday, May 01, 2004

Nortel, how could you? 

"Controversial Bonus Plan 'a waste of . . . money' ": The Globe and Mail reports "Nortel Networks Corp.'s controversial bonus plan has design flaws that gave senior management an incentive to play accounting games and manipulate profits, investors and governance experts say."
Honesty in academic work is one of the areas I am involved in at the university where I work, and it can be very difficult sometimes to figure out the ethical course of action. And in a workplace, good employees look to their Board to signal the direction the company should take, and then the employees try to follow this course. So I do wonder whether, by setting up this type of bonus plan, the Nortel board was signalling that employees should puff up earnings. But still, even if this is what the board wanted, the employees cannot justify cheating because "I was only following orders". Since when, I would ask them, has it ever been OK to lie, regardless of the bonus plan?
Its just so sad, really -- Nortel was such a "Canadian success story" for so long, and so many people were proud of them and believed in them even when the bottom fell out a few years ago. And Nortel took that belief and trust, and just threw it away, ground it into the dirt like an old cigarette butt.

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