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Money & morals at GE

C ul a r l y g e's m a rk e t val u e ro se f r o m $

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Unformatted text preview: c ul a r l y- G E 's m a rk e t val u e ro se f r o m $ 1 4 b i l l i o n i n 1 9 81 t o m ore tha n $ 400 b i l l i o n wh e n h e r e- t ir ed 2 ye a r s l a t e r-F O R TU NE ca l l ed h i m t h e m a n age r o f th e ce n t u r y in 1 999 . Inonesurvey, GEwas ranKed a lowly 72n d insocial responsibility. B ut th a t was l a s t ce n t u r y. I n a p os t- E n ro n e ra , I m m e lt f ee l s G E n ee d s t o b e . m o r e c o n- . s c i ous o f h o w it re l a t e s t o t h e w o r l d ar o u n d it . I n pa rt bec a use o f h i s r oo t s in sa l e s a nd m arke t in g , h e h as mor e o f a n ex t er n a l fo- c u s th a n W e l c h did . " T h e re ' s no d o ub t t h a t I h ave a i w a ys look e d a t t h is c o m pa n y fr o m t h e o ut s i d e in , " Im m e l t say s . H i s perspe c ti v e i s a l so s h aped by h is f a t h e r , Jose p h I mm elt, w h o w o r k e d f o r GE 's a i r- c r a f t e n g in e s d i v is i on i n C in c i nn a t i f o r 38 y e ar s . " 1 s at a r o un d t h e t ab le e v e ry n i g ht w i t h a G E ma ' n , " l m m el t sa y s. " 1 h av e a ve r y g oo d s e n se o f w h a t pe o p l e in t h e ra n k s I' o f GE ' ex pe c t f r o m t h e ir l e a d e r s . " So w h e n b i g co m pan ie s wer e c ha l l e n g ed a r ou n d t h e i ssu es of c o r p o r a t e gov er n a n c e an d e arni n gs m a n i p u l atio n i n 2 00 2 . Im me l t act e d quic k i y . H e pus he d t o add i nd e p e n- d e n t dir e ct o rs to G E ' s b o ard a n d e nco ur- a ge d dir e c t o r s to d i g i n to GE ope r at i on s a n el m e e t w ith o u t m anag e m e n t pr ese nt . Th e c o m p a n y b eg a n a ccoullt in g f or t h e co s t o f s t oc k o p t io n s, an d s p l i t G E C ap i- ta l in t o fq ur separat e b u sin esses, in p a rt t o p r o v i de i n v es t o r s w i t h a c l ear e r l o o k a t i t s op e r a t i o n s . Th e b o a r d a lso g a ve lm m e l t , wh o b as n o con t r ac t , a perf o r ma n ce- b ase d p ay p a c k a ge th a t w as a p p l a u d e d b y s h ar e · h o l d e r a dv o c a t es . It t a kes three hours t o t r av e l a b o u t 1 00 mi l es o f r u tt e d , d u s t y r o ad s be t w ee n Ac- c r a , G h a n a 's ca p i ta l , a nd th e ci t y o f As · ese w a i n a ru r a l eas t e r n r eg i o n w h ere n earl y h a l f t h e p e op l e l i v e o n l e ss t h a n $ 8 5 a ye ar . I ' m i n t h e ba ck s e a t o f a T oyo ta S UV w ith B ob Corco r a n on t h e way t o t h e d e d i ca ti o n of n e w ho s p it a l , m ade p o ss i b l e b y d o n ati o n s f r o m GE . I a sk h im , po l i t el y, w h at t h e h e l l w e a r e do i n g h ere, a n d w hy i s G E spe n d i n g $20 m i l l i o n o f it s s h a r eholder s ' m oney b n ' h ea l th c are i n G h a n a . a c ou n l ry w h er e it do es a l mos t n o bu s i n ess? A t t h e si mp l es t l e vel, h e says, i t is b e- ca u se G E wa n t s t o b e k n o w n a s a goo d c o m pa n y , n o t j u st i n t h e U . S . bu t a r o u nd t h e w o r l d. A n d ex pe c t a t i o ns o f w h a t b i g b u s i n e s s s h o u l d d o ar e ri s in g ....
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