One CEO takes a noble stand

D. Michael Lindsay

The New York Times

The business world got a rare glimpse last week of a CEO with moral backbone, said D. Michael Lindsay. Gerard J. Arpey, the chief of American Airlines, resigned “with no severance package and nearly worthless stock holdings” after 30 years with the company because he found the airline’s decision to declare bankruptcy “morally wrong.” American is the last of the legacy airlines to go into Chapter 11, a tactic that allows carriers to “cancel their debt, get rid of responsibility for employee pensions, and renegotiate more favorable contracts with labor unions.”

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Arpey long opposed that strategy, though he acknowledges that American suffered against competitors that profited by axing pensions and medical benefits. Of the hundreds of executives I’ve interviewed for a study about leadership, Arpey stands out for believing that a CEO is obliged to honor a company’s moral obligations, “even if doing so blunts financial success.” He may be “the only airline CEO who regarded bankruptcy not simply as a financial tool but, more important, as a moral failing.” He leaves with his honor intact, but his departure is a “troubling commentary on American business.”