Weston Smith, frequent speaker on ethics and integrity on business and former CFO-turned-whistleblower for HealthSouth, presented a talk titled “Crossing the Line: An insider’s story” at the Mendoza College of Business in the Jordan Auditorium.The talk, sponsored by the Center for Accounting Research and Education, focused on Smith’s time as CFO of HealthSouth Corporation, the United States’ largest owner and operator of inpatient rehabilitative hospitals and subject of a corporate accounting scandal. Smith spoke about CEO Richard Scrushy, the development of the accounting fraud and the impact it had on employees.“I’m not just talking about a business story, I’m talking about every day life. When I hear people say business ethics I cringe because I think ethics is ethics,” Smith said. “It’s just a question of where it’s played out.”Smith said Scrushy’s development of HealthSouth had an effective model for healthcare and the company’s accounting scandal was atypical for a company with that type of growth.“When I do talk about Richard it’s to illustrate the tone of the company,” said Smith “This company was a very, very good idea because the timing was perfect, the business model was very strong. It was a very fast growing company.”The accounting fraud was not a single, orchestrated event, but rather a progression of small accounting frauds that eventually developed over time, Smith said. Over the years, the fraud was so developed it was almost impossible to stop it.“The rationalization was one of fear — fear of getting caught. Stopping the fraud would have revealed the fraud at that point in time,” he said.Smith said one of his primary motivations to leave HealthSouth and to refuse to continue the accounting fraud was the Sarbanes-Oxley Act (SOX) of 2002. The act required corporations’ top management certify the accuracy of financial information.“I was ashamed of who I was and what I had become. I was part of a massive fraud. Sarbanes-Oxley was a wake up call,” he said.Smith said the most detrimental part of the HealthSouth accounting fraud was the toll it took on employees who were innocent of the actions of the company and whose reputations were later damaged by their association with HealthSouth.“When we think of corporate fraud we probably think of shareholders who lost a lot of money,” he said. “But it’s also the human toll on people. People who had nothing to do with the fraud lost their jobs.”“The value of ethics and integrity in business had both emotional and practical worth in business,” Smith said. “The key to becoming successful in business is maintaining a transparent, honest relationship with employees and company members and recognizing the responsibility leaders have towards others in business as well as other spheres in life.“A lot of people were hurt because I was focused on ‘the what’ instead of ‘the who.’ Never lose focus on who you are,” Smith said. “My definition of a good leader it a leader who will not be defined by his own successes but by the success of those he leads.”Tags: ethics, HealthSouth, integrity, Mendoza, whistleblower
Former Barcelona goalkeeper Victor Valdes has accepted an offer to join Manchester United.The Spain international, who has been training with United in his bid to recover from a serious knee injury, has agreed an 18-month contract.Valdes, 32, won six La Liga and three Champions League titles with Barcelona, before leaving at the end of last season when his contract expired.The deal could lead to reserve keeper Anders Lindegaard leaving Old Trafford.It also poses a question about the future of 24-year-old first-choice goalkeeper David De Gea, who was the club’s player of the year last season and has excelled again this term.His contract is due to expire in 2016, although senior United sources have previously said they were relaxed about him signing an extension to that deal. Before last season started, Valdes confirmed that it would be his final one at the Nou Camp, although his campaign ended in March when he tore his anterior cruciate ligament, an injury that kept him out of the World Cup.Manchester United are third in the Premier League, nine points behind joint leaders Chelsea and Manchester City.De Gea has played in every match for United this season, but conceded four in the League Cup defeat at MK Dons in August and five in thePremier League loss to Leicester on 21 September.However, the defensive record has improved in the last few months with the club only letting in seven goals in their last 13 matches in all competitions.Denmark international Lindegaard, 30, arrived at Old Trafford in a £3.5m deal in January 2011, but has only made 19 Premier League appearances. The other two goalkeeping options are 21-year-old Sam Johnstone, who is on loan at Doncaster, and 24-year-old Ben Amos, who was criticised by United boss Louis van Gaal for letting in Miralem Pjanic’s 60-yard lob against Roma in pre-season.