The High Value (HV) chain of discount appliance stores, started in 1988 with the merger of three smaller chains, achieved sales in excess of $28 billion under the respected leadership of its CEO, John Sutherland. Investors included major banks, insurance companies, real estate developers, and investment banking houses. HV was touted by the media as one of the most outstanding companies in the United States. It was especially praised for its culture, which has been described as being “fresh, dynamic, and exciting.” Fortune chose HV as one of the 10 best companies to work for in the United States. 

John Sutherland came from a prominent U.S. family and was a pillar of society. An active supporter of many prominent causes, he was considered one of the most influential and respected U.S. philanthropists and a patron of the arts. He was also a major contributor to political parties and part-owner of two professionalsport franchises, the Dallas Ravens (in basketball) and the Miami Bulldogs (in football). A star ski bowler in his college years at Dartmouth, Sutherland had devoted considerable time to making it a nationalsport in the United States. In 1989, he founded the U.S. Ski Bowling Association (USSBA), which now has eight teams. As USSBA’s main corporate sponsor, HV attached its name to nearly all the league’s activities. HV’s brand and the USSBA were nearly indistinguishable. 

In 2001, you had the chance to meet Sutherland at a ski bowling match. You too had been a star ski bowler in college and had even been a good professional player before tearing your ankle tendons in a career-ending injury. Although nearly 20 years his junior, you immediately developed a rapport with Sutherland. It so happened that your wife’s cousin was a close associate of Sutherland’s and an investor in a number of Sutherland’s businesses. 

In 2005, you ran into Sutherland again. He invited you to play golf and tennis and go boating with him near his home in Long Island. After a game of tennis, Sutherland asked whether you would like to join HV Discount Appliances as his personal assistant. “Why don’t you come and work for me?” He offered you a generous salary, which was important to you because you had a spouse and two young children to support. You like not only Sutherland but also the group of young, athletic, and talented men and women whom Sutherland gathered around him. You fit right in with this crowd of hard-working, fun-loving people. In contrast, you were bored stiff with your current banking job, and your career there was going nowhere. The bank had never felt like home. The decision was not difficult: You accepted Sutherland’s offer.

After starting work at HV, you were assigned your portfolio of duties as Sutherland’s assistant. One was quite unique and perfectly suited to you: You were to be the company’s liaison to U.S. ski bowling. In this position, you were able to capitalize on the fact that many customers recalled your college and professional ski bowling exploits. 

On July 4, 2014, after a tennis game with Sutherland at his estate, he asked you to pick up some files from his office and then bring them to him. While in Sutherland’s office, you accidentally dropped the files and scattered their contents across the floor. On picking them up, you inadvertently saw a memo from Sutherland to the company’s CFO, with whom you had become close through your work. The memo read, There are no irregularities in the statements of inventory or accounts receivable, as Gomez alleges. These are judgment calls, as we all know. There is no reason to be conservative in making these calls and to make it appear as if our profits are any less than they are. You realize as well as I that every year we are subject to an independent audit by the respected firm of McDuffey and Spather. How can we foolsuch experienced auditors into believing that our inventory and accounts receivable are less than reported? Explain the situation to Gomez, thank him for his diligence, transfer him to a part of the company where he no longer can be concerned with these matters, and provide him with appropriate remuneration for his efforts. The so-called irregularities do not exist, as we both know. 

The past year had not been good for appliance companies. The industry was in a tailspin—too many competitors and insufficient profits. Most investors thought that HV would weather the storm; however, Brian Bagley, an analyst from an obscure brokerage, had started to question why the company continued to be successful. He thought HV had opened too many stores and that many of them would not be profitable. “The numbers,” Bagley claimed, “do not add up.” Sutherland was furious whenever he heard Bagley’s name. “A nobody who did not know what he was talking about” is what Sutherland said of Bagley. Bagley’s analysis led other analysts to start questioning HV’s finances. Yet year after year, HV’s reported profits never seemed to falter. Sutherland earned one substantial bonus after another and was able to cash in on large stock options worth millions. 

The Ski Bowling league, on the other hand, was having difficulties. It was not taking off in the United States. Sutherland had regularly dipped into his personal fortune to provide the league with infusions of cash. Your future was tied to the USSBA. You feared that if it was going nowhere, the same was true of you. Attendance was down, and most teams were near bankruptcy. Without more money, the league might fold. Sutherland had been on the telephone for days trying to persuade his wealthy friends to give more money, but they saw the league as a losing proposition and refused to help. They saw no reason to prop it up and keep it going. 

After your tennis match with Sutherland, you found him in an uncharacteristically bad mood. He sadly said, There is not much more I can do. My bonus and stock options this coming year will be nowhere near what they were in the past. From now on High Value will have to start playing it much closer to the vest. I don’t want the league to fold, but I have sunk as much cash as I can into it. We both know, though, that we could temporarily borrow $500 to 600 million from the company and no one would have to know. What do you think? 

What do you make of Sutherland’s remarks? Use the weight-of-reasons framework to decide how you should address the ethical dilemma you face. In doing so, consider not just what is right but also how you can use political tactics to close the circle. What will you say to Sutherland, and what will you then do?