1. Integrity First: Dr. Joseph M. Grant, General Tommy Franks, and the Deepwater Oilspill James Campbell (Jim) Quick Professor of Leadership & Organizational Behavior John and Judy Goolsby – Jacqualyn A. Fouse Endowed Chair The University of Texas at Arlington, US and Lancaster University Management School, UK Goolsby Ethics Seminar Wednesday, 18 June2014 LUMS LT5 – 2pm to 3:30pm

2. Quick Overview 1. John Goolsby – ethics & integrity Integrity – Courage – Impact Character as a competitive advantage 2. Ethical Framework for Moral Reasoning 3. Dr Joseph M. Grant Adversity (twice) and on to triumph – no easy road 4. General Tommy Franks, US Army (Ret.) American Soldier – the citizen soldier 5. Deepwater Oilspill Easy to moralize, hard to reason morally 6. Self-Regulation and Enforcement 7. Questions & Comments

3. John Goolsby ’64 Integrity – Courage – Impact  A word from my sponsor… John Goolsby – Howard Hughes Company… – The Aviator – Ethical dilemmas…  Integrity first: Ethics for leaders and followers Organizational Dynamics, 42/1, 1–7. 2013 Goolsby 10 th Anniversary Special Edition Recognized with The 2013-2014 Distinguished Professional Publication Award

4. Ethical Framework for Moral Reasoning IntentionAction/BehaviorConsequence Character Theory: Virtue-Ethics Rule-Based Theory Consequential Theory Three standards for evaluating right and wrong

5. Herbert J. Taylor …50 th Rotary International Year President  Club Aluminum Company of Chicago – Took an 80% cut in pay…in the Depression! – Put in $6,100 of his money – …then he prayed!  The Four–Way Test… – 100 word guideline…became – 7 questions…became – 4 questions we know today – Character as a competitive advantage

6. Honor & Integrity Rick Lynch and Goolsby Cohort 9  Cadet Honor Code : “A cadet will not lie, cheat, steal, or tolerate those who do.”  Academy scandal of 1976 – – 150 cadets expelled, rolled back – 50 direct, 100 toleration clause – Did Rick Lynch ever lie, cheat, or steal?...well, yes Confession…and forgiveness (cf., Cameron, 2007)  Self–examination, assessment, & correction

7. Joseph M. (Jody) Grant, Ph.D.  San Antonio, Texas – childhood adversity  Southern Methodist U – All American  Great Texas Banking Crash – late 1980s  Losing it all – or not

8.  Wisdom and knowledge  Courage… in the face of adversity Emotional strengths and integrity  Temperance Humility, modesty, self–control  Transcendence Gratitude, hope, optimism Character Strengths and Virtues Jody Grant

9.  Texas Capital Bank (1998, 2003) Largest initial capitalization in US history ($80,000,000) Community Banker of the Year (2001) Entrepreneur of the Year (2002)  Leadership honors Horatio Alger Distinguished American (2010) Goolsby Distinguished Leader Medallion (2014) Recognitions & Honors Jody Grant

10. General Tommy Franks, AUS  Oklahoma to Midland, Texas – Laura Bush  University of Texas at Austin – not so good  U.S. Army – UT–A  Dangerous neighborhood – a world of adversity

11.  Courage …in the face of adversity Bravery, valor, persistence, integrity  Justice …civic strengths Citizenship, teamwork, leadership  Humanity …interpersonal strengths Social, emotional intelligence  Temperance… humility, modesty Character Strengths and Virtues Tommy Franks

12. Recognitions & Honors Tommy Franks  Military awards and decorations DSM 5, LOM 4, Bronze Star/V 4, Purple Heart 3  Post-military awards and honors Knight Commander of the Order of the British Empire Presidential Medal of Freedom (2004) Goolsby Distinguished Leader Medallion (2004) Horatio Alger Distinguished American (2010)

13. Case of the BP Deepwater Oil Spill Victor Isaias Gonzalez Hernandez McNair Research Intern Study conducted Summer 2013 “Persons are not judge based on how they act in times of comfort, but based on how they react in times of crisis.” – Joseph Karl Grant

14. 20 April 2010 – before, during, after Before: Dates prior to April 20 th 2010 During: April 20th 2010 to November 15th 2012 After: November 16th to present time April 20 th 2010 British Petroleum Deep-water Horizon Oil Spill John Browne Tony Hayward Tony Hayward Bob Dudley Bob Dudley

15. 360–degree Review & Evaluation BP Gulf Deep-water Oil Spill BP Gulf Deep-water Oil Spill Environmental BP Annual Reports BP Annual Reports Engineering Academic Journals Academic Journals International News Articles International News Articles Periodicals Domestic News Articles Domestic News Articles Law Reviews

16. Ethical Standard – Immanuel Kant Categorical Imperative “Act only on that maxim through which you can at the same time will that it should become a universal law.” Practical Imperative “Act in such a way that you always treat humanity, whether in your own person or in the person of any other, never simply as a means, but always at the same time as an end.”

17. Risk & Safety “The pursuit of energy will always involve risk, so it is essential that safety remains front of the mind.” – Carl-Henric Svanberg

18. Conclusion & Judgment about BP  The ethical judgment is inconclusive BP cannot act ethically, or unethically BP executives and employees can so act They acted both ethically and unethically  BP suffered from a culture in which… Leaders emphasized profits over safety, ethics  Culture is a leadership responsibility Douglas MacArthur at West Point (1919-22)

19. The Four-Way Test: Self-Regulation First – Is it the truth ? Second – Is it fair to all concerned Third – Will it build goodwill and better friendships ? Fourth – Will it be beneficial to all concerned ?

20. Limitations of Virtue Ethics  Character strengths/virtues not enough Lack of common understanding Individual fallibility and vulnerability Conflicts of interests among individuals  The problem of self–serving behavior Ethical dilemmas and close calls  Personal accountability and organizational integrity

21. Codes of Conduct & Enforcement  Enforcement mechanisms… pick up where self-control stops  Explicit behavior-consequence links Clear, explicit, unambiguous, consequential  The role of forgiveness & compassion Forgiveness does not mean condoning, approving, or forgetting  External factors …nintended consequences

22. Questions and Comments