Way back in the summer of 2004 , I was a junior analyst at General Electric’s consumer finance back office. As part of a small yet elite team that served Shrikant Dash,then VP CRM and founder- CEO of India’s first analytics company GE Analytics ( later merged with GECIS , which became GENPACT)- I learnt modelling at the hands of people who built the first VBA macros and logistic regression SAS models in India. I also was one of the first holders of GE stock options barely some months out of business school and man I was proud of those 1.90 shares.
And over and over it was drilled into us , in emails ,posters and online trainings – the spirit and letter of General Electric’s integrity. GE’s integrity policy continues to be one of the most demanding in order to cut down on operational risk.Simply put – it said Don’t be caught lying and Dont lie in the first place.
So it was quite disappointing that GE itself is in some sort of accounting scandal at managing earnings, during profit falls at the consumer finance business . The articles now ,the share fall and the suspicion that GE smoothed earnings to boost profits , by cutting down on reserves in the boom days , as it cut back aggressively on the risk portfolio. These are some blog articles http://brontecapital.blogspot.com/2009/03/memo-to-jeffrey-immelt-if-you-are-going.html
but especially Justin Fox’s article in Time http://curiouscapitalist.blogs.time.com/2009/03/04/has-ges-long-history-of-accounting-cleverness-finally-caught-up-with-it/
Guess integrity isn’t what it used to be . Wonder what Neutron Jack would say about this.
I guess integrity in 2009 is simply different than in 2004