Hank Greenberg was the formidable CEO of AIG, the largest insurer in the United States. Mr. Greenberg was removed from his position when the SEC raised issues regarding the company’s accounting practices and the accuracy of its financial statements. AIG eventually released financial statements that reduced its profits by $4.4 billion.

 Mr. Greenberg maintained then and maintains now that he did nothing wrong. A story from his youth offers some insight into his ethical philosophy. When he was stationed in London during World War II, the United States and its military command were concerned about the impression the soldiers left and their conduct. They also recognized the need for the soldiers to have some recreation. The commanding officers gave the

soldiers extra leave days if they used them for cultural events. The commanding officers had the theater, the symphony, and the ballet in mind as culture, not the usual activities for leave, such as drinking and chasing women (and, all too often, catching the women).

The only requirement for the extra leave day was that the soldiers had to bring back a playbill or program from whatever cultural event they had attended. Mr. Greenberg would buy a ticket to the theater, go in, collect the playbill, and then head out the side exit to spend the time on other activities, the types of activities the commanders were trying to have the soldiers avoid, to wit, carousing. Mr. Greenberg had his proof of cultural activities, but he also had his usual fun.

Discussion Questions

1.Did Mr. Greenberg violate any rules as a soldier? Isn’t the lack of clarity on the part of the commanding officers what caused the problem? What’s wrong with using a loophole in the system?

2.Apply the various schools of thought, and see if you can fit Mr. Greenberg into one or more. As you do, think about the following excerpt from an editorial Mr. Greenberg wrote for the Wall Street Journal: “So, in order to stay out of the crosshairs of government regulators, companies are avoiding risks they might otherwise take to innovate or grow their businesses: ’Keep your head down.’” Maurice R. Greenberg, “Regulation, Yes. Strangulation, No,” Wall Street Journal, August 21, 2006, p. A10.

3.Do you believe that a pattern established in youth surfaced as he was running AIG?

4.In a 2006 AP survey of adults, 33 percent said it is “okay” to lie about your age, although only to make yourself younger, not for purposes of underage drinking. What rationalization(s) are the 33 percent using?