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CNN Live Today

Interview with Jeffrey Rosensweig

Aired July 09, 2002 - 13:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: For more on the president's speech and how to protect your money in these confusing times, we turn to Jeffrey Rosensweig. He joins us from Emory University here in Atlanta, where he is a political finance and international business professor -- Jeffrey, hello.

JEFFREY ROSENSWEIG, PROFESSOR, EMORY UNIVERSITY: Hi there.

PHILLIPS: So, are you going to incorporate what the president had to say in your classes?

ROSENSWEIG: Well, I've been teaching ethics within my class for a long time and I'm a finance professor. Perhaps that's the real problem, is a lot of schools just teach it in one little class called ethics. And people laugh at the class. We have to really incorporate it into everything we do: the finance classes, the accounting classes, the marketing classes.

PHILLIPS: Well, do you think this was enough for consumers, what he had to say, to kind of get their faith -- renew their faith when it comes to ethical corporate leaders?

ROSENSWEIG: No, I think it ended up being a non-event for consumers. In fact, the stock market fell a little bit as he was speaking, because he really didn't come up with anything very strong or innovative. It was, you know -- it was a good step, but the consumers are probably cynical and should be cynical, especially because Bush himself is, you know, so kind of likely to be tainted by certain energy deals he has been involved with and big one that started it all off, Enron, so he may be a little bit too little, a little bit too late, and he may be the wrong messenger on this particular issue.

PHILLIPS: So do you think the average consumer listens more to Alan Greenspan than they do the president of the United States when it comes to something like this?

ROSENSWEIG: I think, at least, the average consumer is more affected by Alan Greenspan and the fed. Because -- both the term and interest rates -- if the average consumer is in debt or has their money in the bank, and they'll be effected by that. It is really, maybe, the fatter cats that are affected by this kind of thing. Will they go to jail or not? The poor average consumer has already been hurt; the average consumer probably got into mutual funds or has their pension fund exposed to some of these stocks. And we've already had such a large collapse of the stock market that the average consumer saw their 401(k) become a 201(k) or less. We lost -- many of us, half the value in our funds. So in that regard, it's time to build a new basis of trust and integrity. President Bush did a good job that way. But again, the average consumer is not really going to benefit from everything he said. We do need a restoring of trust. But he himself is going to have to come clean on some things.

PHILLIPS: Such as?

ROSENSWEIG: Well, I mean, this energy deal looks kind of suspicious. You know, he was a director, sold a lot of their stock sometime before it went down a lot. Didn't report it to the SEC.

PHILLIPS: You're talking about Harken back in the early 90s.

ROSENSWEIG: Exactly.

PHILLIPS: He was cleared of that though.

ROSENSWEIG: Well, I mean, I don't know what it means, I mean, again -- it is one thing to stand up and say, it's about character, it's ultimately about integrity. Again, I don't want to say that I'm, you know, a political person into this, I just think myself, as a consumer and a professor, if I look at Martha Stewart or I look at George Bush's dealings, I think, are they being like Caesar's wife? Are they making sure they're above any type of reproach? I think you have you to be very careful in these public positions. Given ourselves as professors, I think we have to be very careful because we influence a lot of future business leaders.

PHILLIPS: Well, yes, let's talk about that. Let's talk about you say you teach ethics, tell me about your course, what do you tell your students?

ROSENSWEIG: Well, let me -- let me ...

PHILLIPS: And how do you make it stick? A lot of business and finance students want to make a lot of money. They want to be rich people, Jeffrey, you know?

ROSENSWEIG: Yes, I got you. And President Bush, I think he was right to point to business schools in his speech and say, we have do a better job of making sure that the future business leaders have a little more ethics. But gain, my course is more of a finance course, and I think that's how I make it stick, is I say, even when you're teaching finance, you have to slow down and always ask yourself, what are the ethical implications of what you're doing? Or is there some social question in here or ethical question? Because if you don't make it stick, if it's just in some little required course called ethics, because everyone laughs at that. The way we make it stick here at the business school at Emory, is we try to bring in leaders that are very ethical.

We don't always guess right. I mean, we didn't bring in Ken Lay from Enron or Bernie Ebbers; we're bringing Warren Buffett in. We're very lucky, because he knew that Roberta (ph) was weighted very well. Obviously, Warren Buffet can't go to every school, and he usually talks more about ethics than he does about being rich or making money. And we bring in Jim Blanchard, who's a tremendously ethical and principled CEO of a company called Synovus, which "Fortune" magazine had rated America's number one company to work for. And he talks about treating people right and principles. And I bring him right into my finance class.

Because people like Warren Buffett or Jim Blanchard, if you look at the stock performance of their companies, have had tremendous financial performance but they do it on a basis of ethics and treating people well. So I think the most important thing is to bring in good role models and to present good role models.

PHILLIPS: Jeffrey Rosensweig. I remember ethics. It was a required class when I was in school. Is it required there where you teach?

ROSENSWEIG: It's required, but we have do more of it and so do other schools. Most of us do it in a very small package. And I think a lot of us will have to reexamine this. But also, most business leaders are ethical and therefore we have to go out there and point to them and get some other people on the front page besides people like these WorldCom people. They should be in jail pretty soon.

PHILLIPS: Jeffrey, thank you.

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