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Executives Behaving Badly

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By SHANNON BEHNKEN

The Tampa Tribune

Published: April 7, 2008

Updated: 04/07/2008 12:12 am

TAMPA - In the business world, lying and cheating can end up with executives going to jail.

But for the company, that's not even the worst of it, says Jonathan M. Karpoff, a professor of finance at the University of Washington.

"The legal penalties are one thing," he said. "But the effect on the reputation is three times worse."

That's the lesson Karpoff says people serving on boards of directors for major companies need to learn: "It's a common-sense notion, but a lost reputation dooms a business."

He points to Enron and Worldcom as examples.

Karpoff and other experts plan to speak to local business people Thursday at the University of South Florida as part of the school's Corporate Governance Series. Other speakers include:

•Richard J. Dobkin, recently retired from the Tampa office of Ernst & Young. He also serves on the compensation and stock option committee for Cracker Barrel.

He'll talk about audit and compensation committees and implementation of new Securities and Exchange Commission regulations.

•George Guerra, a shareholder in Fowler White Boggs Banker's securities, financial services and white-collar practice. He's a former president of Raymond James Financial.

He'll talk about backdating and when it's illegal.

•Ralph A. Walking, executive director of the Center for Corporate Governance at Drexel University.

He'll talk about increased shareholder access to proxy statements.

Given accounts of business misconduct over the past five years, the topics are timely, said Bob Forsythe, dean of the USF College of Business.

"When the Enron scandal happened, everyone thought it was fixed by legislation," he said. "Now we have the subprime mortgage crisis."

Forsythe said what he likes about the speakers' messages is that they're calling for people in power to take responsibility.

"Most of these people speaking are not calling for more legislation," he said. "They're calling for educating boards of director members to do their due diligence to prevent business scandals."

Thursday's seminar is open to the public; the fee is $149, which includes workshop materials and lunch. There are some discounts available. The seminar runs from 8 a.m. to 2 p.m. at the USF College of Business. For information, go to www.coba.usf.edu.

Reporter Shannon Behnken can be reached at (813) 259-7804 or sbehnken@tampatrib.com.

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