On Stewardship, MF Global, and Damning the Dilettante
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Currently residing on my bedside table, along with a lamp too ugly for my mother to hold onto and a long list of outstanding debts, is a copy of Robert Miles’ The Warren Buffett CEO. A business book with a heavy human-interest bent, Mr. Miles' accounts of the various management teams at the head of various Berkshire-Hathaway companies are, unsurprisingly, various. From Rose Blumkin, whose life twisted from the poverty of a nineteenth century Russian girl to the hard-earned comfort of a Nebraskan furniture tycoon, to Al Ueltschi, who parlayed an early awe of the sky and money made off a hamburger stand into the world’s first—and finest—flight simulator, the people in whom Mr. Buffett has placed both his faith and finances are, it would seem, a crowd as unique as the profits they produce. Still, if you scour this assembly for common threads, the following will emerge: all these people run a successful business, and all these people know their business damn well.
This, an intimate understanding of and singular obsession with their work, is a point of emphatic pride in each and every one of Buffett’s CEOs. They boast about killing the competition by virtue of sheer knowledge—which American manufacturer makes the cheapest carpeting, what an emergency landing actually feels like, what gives that special flavor to the world’s favorite drink. More tellingly, though, they also admit, almost across the board, to feeling compelled to “make Warren proud”, to validate his show of faith in their respective enterprises by overseeing them that much more intently, with that much more fervor and fastidiousness. In short: by striving always to be better stewards.
Stewards. As I browse through the headlines in an attempt to make sense of, or at least come to peace with, the stunningly familiar narrative underlying the MF Global (NASDAQOTH: MFGLQ.PK) meltdown, it is this, the story’s utter lack of stewardship, that strikes me with the most force. Come to the Capitol to answer for his firm’s actions, Jon Corzine, the last man behind the wheel at what was once MF Global, assumed the now-infamous stance of feeling very bad and knowing very little. Deftly shuffling attention away from his guilt and on toward his ignorance, Mr. Corzine coyly admitted that he “did know know where the money [was]”, and would be hard pressed, now that you mention it, to say who exactly “pressed the button” that made all these bad stuff happen in the first place. Aw shucks, went his song and dance, this sure is mighty complicated .
To which I say: bullsh*t. What happened at MF Global prior to its demise, from the frantic, hazy, and volume-heavy particulars of their final days to their long-standing affinity for high-risk behavior, may seem complicated to my girlfriend, my mother, and myself, but it may not, and must not be allowed to, seem complicated to MF Global’s Chief Executive Officer. Having congratulated himself merely for showing up (after all, and as he reminded his comrades: he could have pleaded the Fifth), Mr. Corzine went on to deliver a testimony that nakedly doubled as a self-defense, predicated upon the not-so-tacit assertion that his running MF Global and his not fully understanding the nature and consequences of operations at MF Global were not, at the end of the day, mutually exclusive.
Bullsh*t. Bullsh*t, bullsh*t, bullsh*t. Call me old-fashioned, or rabble-rousing, or, as the writers of the “We Are Wall Street” manifesto almost certainly would, infinitely lacking in my grasp of our country’s complex financial structures, but to my mind a painfully clear understanding of what your company does is part and parcel of standing at its helm, and claiming that you didn’t understand how to hold the wheel, or couldn’t make sense of the water beneath you, does not absolve you in the slightest in the wake of the crash. To my mind, what Mr. Corzine did in Washington this past Thursday was not pleading ignorance; it was admitting fraud. Unfamiliarity with their company — with how it sells furniture to the citizens of Nebraska, or prepares pilots for life-threatening situations, or allocates large quantities of money in a variety of intricate and volatile ways — makes a CEO an impostor, plain and simple. And because he is an imposter, Mr. Corzine’s ignorance is not his saving grace. Instead, it is his burden to bear.
Of course, that’s presupposing that his ignorance is something more than a finely tuned alibi. “Governor, Senator…I don’t even know what to call you,” one panel member confessed at the hearing’s outset, referring, in an unsettlingly light-hearted tone, to Mr. Corzine’s crisscrossing professional history. Once a top dog in the state of New Jersey, once a top dog at Goldman Sachs, once a top dog within the very governing body before which he currently stood, Jon Corzine testified before United States Representatives with all the confidence, comfort, and security of a lifelong dilettante. Gray-bearded and polite, he and his former colleagues took a moment to remind the American people that, for a certain breed of businessman, the position of CEO—or Senator—is not so much a matter of committing to a cause as it is sticking one’s hand, yet again, into another cookie jar. That, it would seem, is what the man we “don’t even know what call” did when he assumed control of billions of dollars of American citizens’ money. As to whatever it is he pulled out of that jar: I wonder how it tastes.
Because I know how it smells.
Lyons George did not hold a position in any of the above-mentioned companies.