Credo Credulity

Are corporate credos worthless?

At its best, a corporate credo can provide inspiration and direction to help management focus when times are hard. Johnson and Johnson’s credo is a great example. It was written 70 years ago by Chairman Robert W. Johnson himself, just before the company went public, and is chiseled in granite in the entrance to the corporate headquarters. It embodies Johnson’s commitment to the firm’s customers, employees, communities, and shareholders.

But sometimes a credo is just a clever marketing ploy. Enron had a highly developed corporate code of ethics espousing high-minded beliefs. They put together a compelling video that touted their good deeds in the community and the character of their leaders. But many of those leaders are still in jail, and the company’s name is now a byword for corporate corruption.

Credos matter when leaders and managers take them seriously. If a credo is mainly a clever way to use business ethics as a marketing strategy, it’s worse than useless. But if a firm’s core beliefs really make a difference—the way J&J’s did during the Tylenol crisis of 1982—then those values become valuable.

A credo can be priceless, but only if changes our actions. When it comes to ethics—business or personal—actions speak louder than words.

Douglas R. Tengdin, CFA

Chief Investment Officer

By | 2017-07-17T12:34:23+00:00 January 13th, 2014|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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