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U.S. Treasury Secretary Addresses Corporate Governance

October 17 – Paul H. O’Neill, U.S. Secretary of the Treasury, addressed the RC cohort on the topic of Corporate Governance as part of the ongoing HBS Leadership and Values initiative.

Dean Kim Clark introduced the former Chairman and CEO of Alcoa as “tough minded,” liking “facts and data,” but “not hard hearted.” Clark, who served on Alcoa’s Science Advisory board in the 1980s, went on to describe O’Neill as a “compassionate” person, someone who “cared about people,” and was “not afraid to do right,” as evidenced in his role as protagonist in the HBS case, Workplace Safety at Alcoa .
O’Neill began by summarizing his views on the how leaders should govern the workplace. According to O’Neill’s own “value calculus,” a leader needs to be able to answer yes to the following three questions:

o Are all employees treated with dignity and respect?
o Do all employees have access to the knowledge and tools required to make a contribution to the organization that gives a meaning to their life?
o Does someone notice that that contribution has happened?
O’Neill maintained that these values are not tied to any particular culture or geography, and get at the essence behind the oft-quoted “syrupy” mantra that companies’ “most important asset is people.”

At Alcoa, O’Neill translated dignity and respect for employees into a workplace where safety at work superceded all profit goals, and a zero-tolerance policy on deviating from safety operating procedures and reporting requirements was instated.

The result of such steerage from Alcoa’s CEO was a dramatic reduction in key safety statistics. “There is never a tradeoff between values and economics,” O’Neill reiterated.

O’Neill continued by drawing parallels between his experiences at Alcoa, and his current role overseeing the coffers of the world’s largest economy. He singled out U.S. healthcare as an area in which process improvements could lead to massive increases in service levels as well as huge cost savings. Further, O’Neill is working to instill a “value culture” at the U.S. Treasury, pointing to the fact that its loss workday rate is 25 times Alcoa’s.

O’Neill’s parting words to the RC were not to use the current adverse job climate as an excuse to “cop out” of the responsibilities of being a leader. “The world is desperate for your talent. You can make a difference. Indeed, you have an obligation to do so,” the 66-year old Treasury Secretary concluded.

October 21, 2002
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