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Mild and brief. The recession that began in late 2007 might have possessed both those characteristics had corporate leaders in the years prior worried more about cultivating ethical business practices than about pursuing ever-greater profits, suggested a former chief financial officer for JPMorgan Chase & Co. in remarks delivered to an audience at Harvey Mudd College.

Dina Dublon asserted that many boardrooms and headquarters now seem like values-free zones because of arguably poor role-modeling by their chief executive officers.

“The CEO we have tended to admire in the past two or three decades has been the one who could get the biggest return in the shortest possible time,” said Dublon, CFO of the New York-based banking giant from 1998 to 2004 and, during that same span, a fixture of Fortune magazine’s 50 Most Powerful Women in American Business. “That kind of hard-edged leader—delivering return on capital at no matter what emotional or social cost—is, in my opinion, yesterday’s leader.”

Blame for the crisis
Dublon had come to HMC to offer “meaningful personal insights into the challenges facing today’s leaders” while speaking on the topic of “Ethics, Free Markets and the CEO.” Early in her presentation she faulted traditional CEOs and their companies for ethical vacuity. “Too often, values have been cast aside as irrelevant...giving rise to...the amoral corporation.”

She did, however, laud U.S. companies for their policies and procedures aimed at rooting out corruption and at achieving regulatory compliance, but added that such programs too often fail to stop organizations from dancing around the edges of the rules. “They are generally directed at complying with the law as written” while showing “very little respect for the spirit of the law.”

To underscore her point, Dublon quoted from a recent New York Times article in which a senior banker explained that no matter what new rule the authorities concoct, corporate heads will every time devise a legal way to circumvent it.

Tying free markets in knots
Dublon—at present a director on the boards of Microsoft, PepsiCo and Accenture—intimated that the current recession has been notably painful due in part to corporate success at gaming the system. This, she said, was accomplished by “de-legitimizing independent analysis and driving inaction by regulators.”

Ruinous as well: the misplaced hope that market excesses would be fully self-correcting, leaving companies scarcely worse for the wear when all was said and done. Unfortunately, “the scale of such [self-]correction was never considered by the financial institutions or by those in power to oversee the total picture” because the extent to which the system failed “had no statistical precedents,” Dublon said.

Selfishness was the ultimate cause of all this, Dublon contended, even as she acknowledged that business leaders and companies acting in self-interest is virtuous behavior. “Self-interest needs to survive as a powerful force,” she said. “But the system requires intervention to ensure that public good is not destroyed in the process.”

Ethics, the responsibility of all
A director of the Global Fund for Women and a co-chair of the Women's Refugee Commission, Dublon also spent time during her speech describing the new breed of corporate CEO now poised to dominate. These next-generation leaders, she explained, are striving to create sustainable value within and beyond their organizations. Further, they want to “understand the way that public and private sectors are coming together” so as to work constructively within that framework and “think global, act local.”

Dublon admonished the audience to consider ethics as a universal obligation. “[It] is something that we all have the responsibility to bring back to the table,” she said.