FORT WORTH, Texas — One top Fort Worth business executive said Thursday that the cure for corporate malfeasance is not more laws, but for company leaders to follow — and instill — a moral code as well, the Fort Worth Star-Telegram reported.
Speaking in terms more commonly heard from evangelical preachers, Matt Rose, chief executive of Burlington Northern Santa Fe Corp., said the rampant outbreak of corporate financial chicanery is at its heart an issue of morality.
“Alan Greenspan calls it infectious greed; God is clear in the Bible, calling it sin,” Rose said at the Fort Worth Business Forum, a semi-annual event of the Fort Worth Chamber of Commerce.
Existing laws against fraud, insider trading and other practices should be vigorously enforced, Rose said, adding that tightening rules on financial reporting may also help restore investor confidence.
But real reform can come only when companies operate not just within the letter of the law, but in the spirit as well, he said.
“Within every company there is a business culture — a moral DNA, if you will,” Rose said. “Included in the DNA is a set of values that will guide and direct the company officers and board of directors.”
As a practical matter, that means companies must honestly disclose their true financial condition, executives’ compensation and all transactions involving officers and directors so that analysts and investors can rest assured that they have an accurate picture.
“The bottom-line question that must be asked in every boardroom is `Are we complying with the spirit of the regulation or the law?’ ” he added.
New SEC regulations requiring that CEOs and chief financial officers certify that their companies’ quarterly financial reports are accurate won’t be a problem for Burlington Northern, Rose said.
“Earlier today, I signed all of the documents certifying our financials, not only for accounting treatment principles, but also stating to the best of my knowledge we are complying with the intention of the principle,” he said.
He said Burlington Northern’s financial statements are clear on the compensation that he and other executives and board members receive, including detailed accounts of their stock options.
And unlike some, Burlington Northern doesn’t make sweetheart loans to its executives, he said.
In response to a question, Rose said the company is alert to the potential threat of terrorist attacks and is working with federal and local law enforcement authorities to improve security on its trains and at its railroad and shipping facilities.
Four weeks ago, Burlington Northern shut down operations briefly at its shipping facility at the Houston ship channel as a result of a terroristic threat.
The railroads are both a vital economic engine and a vulnerable target, he said.
“We’ve got to keep the economy going and at the same time hope they don’t hit us,” Rose said.