COMPAS Poll/Survey
February 27, 2006

Truth or Consequences for CEOs:

  A Weekly BDO Dunwoody CEO Business Leader Poll by COMPAS in the Financial Post
Policy and Opinion
Business and Finance

COMPAS’ weekly survey of CEOs and business leaders explored panellists’ perceptions of the truthfulness of company leaders. The poll was conducted in the wake of the Enron, Worldcom, and Nortel scandals and on the heels of the Radio Shack CEO’s claiming a university education that he did not have. After declaring on his resume that he held degrees in theology and psychology, David Edmondson resigned as CEO of the electronics firm on Monday after being found out.

According to this week’s CEO poll, he needed to go. “The CEO’s entire personal integrity is affected by even a minor discrepancy in the CV,” explained one CEO. “This is the reason [that any dishonesty] cannot be accepted.” The respondent’s cohorts heartily agree. Seventy-two per cent of them say those who fabricate their resumes should get the boot.

A CEO’s job application is not normally the place where he or she is most apt to be duplicitous, according to the panel. CEOs are most likely to be untruthful when discussing benefits with unions or in conference calls with financial analysts when their companies are underperforming. By contrast, they are most likely to be truthful and straightforward in discussions with insiders such as the CFO or in conference calls with financial analysis when their firm is truly performing well.

Looking to the future, members of the COMPAS panel of CEOs and business leaders recommend an adaptation of Sarbanes-Oxley to head-hunting. Just as public companies are required to engage separate auditors at arms’ length from consultants, companies should generally hire separate consultants to recruit talent as opposed to verifying the claims of those being recruited.

These are the key findings from this past week’s survey of the CEO and business leader panel for The Financial Post under sponsorship of BDO Dunwoody LLP.

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