"The easy part of giving back is writing a check. But time is equally valuable as money." This is the ethic by which Russell Carson, the winner of the 2002 Botwinick Prize in Business Ethics lives his life.
The Botwinick Prize is awarded each year to "an outstanding leader who exhibits the highest standard of ethical conduct in business." The prize was established and endowed by Columbia alum Benjamin Botwinick and his wife Bessie. Previous winners have included Starbucks CEO Howard Schultz (2000) and Kohlberg Kravis Roberts & Co. founder and chairman Henry R. Kravis (1999).
This year’s ceremony was incorporated with Columbia Business School’s first annual Social Enterprise Conference on October 11. Every year, Russell Carson, a 1967 graduate of Columbia Business School, donates millions of dollars and hours of time to his favorite causes. Mr. Carson worked for 15 years at Citicorp, where he ultimately served as CEO. He left Citicorp to found Welsh, Carson, Anderson & Stowe, a private investment firm that focuses on acquiring and building firms in the information services, communications, and telecommunications industries. However, the Botwinick prize honors Mr. Carson for his contributions to the community, not his success in business. "I have never known Russell to sit on the sidelines," praised Columbia Business School Dean, Meyer Feldberg, in his introduction. "Russell doesn’t lend his name to organizations unless he is deeply committed or heavily involved."
Dean Feldberg knows Mr. Carson well because the latter chairs the Columbia Business School Board of Overseers. In his remarks, Dean Feldberg described the many charitable organizations with which Mr. Carson is involved. Mr. Carson sees the disparity in education between the haves and the have-nots as one of America’s most pressing issues. As a result, he established the $70 million Inner-City Scholarship Endowment Fund. Additionally, he is vice chairman of the Rockefeller University Board of Trustees and a trustee of Dartmouth College and of the Metropolitan Museum of Art. Beyond his membership on many boards, Mr. Carson has donated money to 75 different causes in the last year alone. His many contributions include a $10 million gift to Columbia Business School. The well-known ethical transgressions over the past year have elevated the significance on this year’s Botwinick Prize.
During his acceptance speech and the ensuing question and answer session, Mr. Carson addressed many of the issues haunting the business world. Mr. Carson believes that the tremendous amassing of wealth during the 1990s led to a sense of entitlement among business leaders: "Executives saw themselves as owners, not employees." In the process, they lost their ethical compass. Mr. Carson believes that in the wake of the scandals, too much attention is being paid to bankers and auditors, rather than to corporate executives. He contends that if an executive profits from a company while people lose their jobs and shareholders lose their investments, that executive should be forced to return the money. It may be the result of criminal activity, which may be the case with Enron and other firms; or it may be innocent people mismanaging companies, as in the case of many dot-coms. Either way, argues Mr. Carson, the money should be returned.
Mr. Carson also blamed the focus on short-term gains for the current business crisis. Executives have had incentives to inflate the short-term value of their firms at the expense of their long-term wellbeing. That is one way in which he contrasted his firm to the competition. When Welsh, Carson, Anderson, & Stowe invests in another firm, he sees it as a seven to ten year endeavor. Furthermore, Mr. Carson emphasized the importance of relationships in the business sector. He explained, "A handshake is more important than a contract… There is no such thing as a good deal with bad people." Trust is an integral part of any deal. If any partner in his firm distrusts another party, he/she has the right to reject the deal.
Despite the necessary discussion about the ethical lapses in business, Russell Carson has a very positive outlook on the present and future states of business in America. He reminded the audience that those guilty parties represent a statistically insignificant portion of the business world. He stated that over the next year, there will be prosecutions, legislative changes, and new methods for self-policing. "The result will be a reaffirmation of the system."