The Trump OrganizationDonald Trump's private family business is known to have operated in margins of the legal. Trump started with his rough vibe Real estate development in New Yorkafter all.
And so, as someone who pays close attention to how operating businessesi was stuck on Testimony February 27 of Trump's former “assembler” and personal lawyer Michael Cohenwho also served as executive vice president of the Trump Organization.
While I learned a little that was newthe testimony was still troubling — but not about what it said about the Trump Organization.
Instead, what I found most remarkable is how the behavior attributed to Trump the businessman, however extreme, actually reflects actions and behaviors that are widespread in corporate America in general.
Putting leaders on a pedestal
Trump is known to run his businesses – both business and government – loyaltyrather than, say, ability or performance.
What Cohen highlighted was how debilitating, even destructive, the lionization of individual leaders and the expectation of loyalty can be, whether we're talking about Trump, the Facebook CEO Mark Zuckerberg or Apple Steve Jobs.
Cohen said was “fascinated” by Trump, calling him a “giant” and an “icon”. Being around Trump was “intoxicating,” he said, and “everyone's job in the Trump Organization was to protect Mr. Trump.”
Cohen's testimony revealed how blind this commitment to an enchanting person became, leading him to replace judgment with worship. Cohen admitted to lying to Congress and falsifying campaign finance reports in the name of siding with his boss.
Cohen's description may seem surprising. But to one who has extensively studied leadership in business organizationsI recognize an unfortunate pattern that dominates corporate America.
Companies too often fall into the trap of romantic leadership, often to their detriment implementation. With placing their own role front and centerCEOs boost their self-esteem and justify their power and their amazing financial rewards.
And when employees attribute traits like heroism to their leaders, they tend to imbue them with the traits of charisma, strength, and determination. That which sinks, unfortunately, it is self-righteousness and individual initiative.
It's a comforting delusion. Exists abundant evidence to suggest that the subsequent performance of omnipotent charismatic CEOs often lags that of competing firms led by less famous executives.
Reuters/Francois Lenoir
Tax games
Another highlight of the hearing was Cohen's testimony that Trump has repeatedly inflated his assets to reduce the property taxes and other taxes he owed – while inflating them when it served his purposes. Cohen called Trump a “crook.”
While Trump's alleged behaviors may seem extreme, they are all too typical of corporate America. surprisingly widespread tends to reduce its tax burden – or avoid it altogether – by pushing the limits of legality.
Many of the largest American companies take advantage of of tax loopholessuch as accelerated assessment, tax havens abroad and so on, to achieve the same goal Trump was allegedly pursuing: a lower tax bill.
More than half of Fortune 500 companies with more than $3.8 trillion in profits paid zero taxes for at least one year between 2008 and 2015. More recently, Amazon paid nothing with revenues of $9.4 billion in 2018.
Of course, we won't know exactly how successful Trump has been at avoiding taxes until his tax returns are released.
Reuters/Molly Riley MR/TZ
Checks and balance sheets
But now we come to the big difference.
All companies have their flaws. However, when they are public, there are also checks and balances thanks to independent board members and watchful shareholder advocates, as well as a myriad of governance and transparency rules enforced by the Security and Exchange Commission.
As the head of a private business, Trump has been able to avoid almost all of this accountability and transparency.
Cohen's hearing suggests Trump may finally be learning what it feels like to be the CEO of a public company.
