NEW YORK (TheStreet) -- Within the last few days of writing this commentary, and prior to celebrating our July Fourth independence, two significant scandals have been resolved, one in the banking industry and another in pharmaceuticals.
GlaxoSmithKline GSK agreed to plead guilty to misdemeanor criminal charges and pay $3 billion to settle what government officials described as the largest case of health care fraud in U.S. history.
GSK targeted the antidepressant Paxil to under-age patients, pushed Wellbutrin for uses it was not approved for, falsified articles, used illegal kickbacks, and also failed to give the U.S. Food and Drug Administration safety data about its diabetes drug Avandia.
Barclays PLC BCS , the huge international banking concern of the U.K., has agreed to pay $453 million in fines to the U.S. Justice Department and the U.K.'s Financial Services Authority over charges it manipulated the LIBOR, a short-term interest rate used to calculate consumer bank loans, from mortgages to credit cards.
They're very different and yet identical. Why?
Different incidents and different industries. Yet the reasons are the same: Both U.K.-based giants had someone(s) at the top who made very bad decisions, and influenced enough subordinates to support turning an exception to policy and practice into the rule. This is not what is meant by exceptional leadership.
What's going to come of these two companies?
What's going to come of these two industries?
What's going to come of leaders performing badly in general?
What should happen?
Leaders directly responsible for the activities should be held accountable:
Sounds a bit harsh. It should.
Until business in general and industries in particular make the consequences of misconduct harsh, others will continue to find quick ways to make a buck, regardless of how many fiscal and literal lives are put in jeopardy.
One bit of "silver lining to this cloud" is that GSK plead "guilty" as opposed to the proverbial, common U.S. company weasel legalese that "this settlement in no way is an admission of guilt." To that, maybe we can say GSK gets it. Time will tell.
Industry, investors and consumers will all be watching the next step(s) to regaining trust and value in both Big Pharma and Big Banking.