Former AOL Time Warner chief executive Gerald Levin stressed the obligations companies have to the public interest Tuesday night before an audience of over 75 people at the Yale Law School.
Levin, who retired as CEO earlier this year, spoke about corportate responsibility in light of the recent scandals. He recounted his experiences running the media giant and provided his thoughts about recent efforts for corporate reform.
While Levin discussed the need for legislative solutions, he said corporations must redefine their goals and values in the wake of recent scandals.
“In picking a director or CEO, qualifications must include a moral dimension,” Levin said. “The notion of value-based leadership is something we need to have not only in corporations, but in government and academia.”
Levin said many of the corporate scandals can be attributed to the rise of what he called “the imperial CEO.”
“There was an environment where the CEO — basically would do what he or she would like to do and said after the fact that it was best for the shareholders,” Levin said.
Levin also discussed his experience as one of the primary architects behind the merger of America Online and Time Warner, a deal that some analysts and shareholders criticized as unwise. Once the merger was completed, the new company was already $18 million in debt and Levin soon fell out of favor with many of the media giant’s top executives, including vice chairman Ted Turner.
While Levin did not specifically mention any of the issues that surrounded his departure last May, he said the changing nature of business — and the influence of the Internet, in particular — may have rendered his management style obsolete.
“I believe that it’s going to take a new generation of management — to try and understand the nature of the world we’re living in,” Levin said. “One of the reasons I retired was because I was confronted with the fact that many of my ideas were thirty or forty years old.”
Although Levin no longer serves as a chief executive, he remains active in the corporate world, serving as a co-chairman of the New York Stock Exchange’s Corporate Accountability and Listing Standards Committee and deputy chairman of the board of directors of the Federal Reserve Bank of New York.
While he said legislative action was necessary, Levin said political factors may have caused Congress to act too quickly in drafting bills to combat corporate malfeasance. In particular, he cited the controversial appointment of William Webster — former director of the Federal Bureau of Investigation and Central Intelligence Agency — to serve as chairman of the Public Company Accounting Oversight Board as an example of the unintended consequences of the new laws.
“All of the sudden, something that was designed to be an effective oversight is in a political morass and has called into question the whole process,” Levin said.
John Leibovitz LAW ’03, who organized Levin’s appearance, said he invited the former executive because of Levin’s familiarity with the issue of corporate integrity.
“It’s a very timely topic and I had just read and heard that he had a lot to say about it,” Leibovitz said.
Incidentally, AOL Time Warner has not escaped charges of corporate wrongdoing unscathed. This summer, the company began an internal investigation into $49 million of questionable revenue.
Yet Rob Parker LAW ’04 said Levin’s status as an executive did not compromise his ability to propose solutions to business ethics.
“I think that executives may have been part of the problems, but they have to be part of the solution,” Parker said. “I’d rather have executives talk about the issue — than outsiders.”