Bank CEO Addresses Atlanta Business Graduates
May 21, 2004

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Raymond R. Christman, president and chief executive officer of Federal Home Loan Bank of Atlanta, addressed more than 285 graduates from Mercer University's Stetson School of Business and Economics. 
 
Christman, who previously served as chairman of the Federal Home Loan Bank in Pittsburgh, has also served as a senior executive for a number of private non-profit and public sector organizations in Pennsylvania. He has worked as the secretary of commerce for the Commonwealth of Pennsylvania and served as executive director of the Urban Redevelopment Authority of Pittsburgh.
 
Most recently, he served as president and chief executive officer of Pittsburgh Technology Council, a regional business association and economic development organization.
 
Christman holds an undergraduate degree in business from Florida State University and a master's degree from the Graduate School of Public and International Affairs at the University of Pittsburgh. He serves on the boards of the Metro Atlanta Chamber of Commerce, the Atlanta Neighborhood Development Partnership and the Midtown Alliance. He also is incoming board chair of The Community Foundation of Greater Atlanta and The Georgia Trust for Historic Preservation.
 
 
The following is Christman's commencement address to the Stetson School of Business and Economics graduates May 15 at the Cecil B. Day Campus in Atlanta.
 
 
Greetings to representatives of the faculty and staff, to family and friends, and, most of all, to the class of 2004: You are finally finished. Congratulations!
 
From what I understand, most of you are already employed –some with families as well – and you achieved this degree while juggling, work, home, and school. Of course, there are others who devoted full-time to their studies in the hopes of changing careers or beginning work in a different field. In all events, it has taken a lot of sacrifice, many late nights at the computer, as well as a fair share of Google searches on exciting business topics such as generally accepted accounting principles or Sarbanes-Oxley (which coincidentally is a topic I will touch on later).
 
It was with great pleasure that I accepted this invitation. For one thing, it's always tempting to take a look at people who are in a position similar to where I once was. Of course, in that regard, I am taking what you might call a "30-30 perspective": except for 30 years and about 30 pounds, I could be out there with you.
 
A second reason why I appreciate so much having this opportunity is that the invitation was extended through my good friend, Bob Hatcher. Bob has been a pre-eminent business and community leader in Macon for many years, and has had a distinguished career in my own field of banking. He has also given back much to Macon and the state of Georgia, especially Mercer University. Moreover, this is obviously part of Bob's DNA, because he comes from a proud and distinguished family, including his grandfather, Eugene Stetson, for whom this School of Business and Economics is named.
 
Finally, I would be remiss if I did not make a brief comment about Mercer University. You are graduating from an outstanding private university and – perhaps even more significantly – one whose star is on the rise. President Godsey and his staff are building a school whose reputation continues to grow within Georgia's business and civic community and I predict Mercer will become one of the most prestigious private universities in the south over the next generation, joining the ranks of Emory, Davidson, and the like.
 
This is an important moment in your lives, and you should take the time to enjoy and appreciate it. Achieving an MBA, particularly when balancing multiple responsibilities, is a tremendous accomplishment. I'm sure however that you also realize that you are moving to the next phase of your lives and careers at a particularly uncertain time.
 
This is ironic, because just four years ago, we entered a new century as a country with seemingly more stability and assurance about the future than at any time in recent memory. The Cold War had been won and America was dominant globally with no major adversaries. And the American high tech, Internet economy was the envy of the world.
 
What a difference a few years make! Today, of course, we face a new, growing threat – radical Islamic terrorism – that has the potential to pre-occupy us for years to come. And on the domestic front, we have an economy, that while for the moment seemingly growing stronger, has been beset in recent years by a bursting bubble, corporate scandal, and threats of globalization.
 
What do those trends and events mean for you as you contemplate beginning your life's work?
 
I'm certainly not qualified to speak to the first topic of international events, notwithstanding its current overwhelming importance. But I thought I would offer some thoughts today on the second subject, particularly as it relates to the role of business in U.S. society today, as well as the responsibilities and challenges you face as future business leaders.
 
We need to begin by remembering that this is a particularly inauspicious time for America's business community. There has been a now-renowned series of corporate scandals and resulting criminal trials that has created a jaded public view. A parade of CEOs and senior executives continue to be taken away in handcuffs, and the business media keeps a scorecard. And even as these excesses are wrung out of the system, and put through the legal grind, a new wave of scandal takes place. For example, the coverage of two high-profile convictions of business people in recent months focused more on their efforts to obstruct justice and railroad investigations instead of on the actions for which they were prosecuted.
 
Trading manipulation, conflicts of interest, padded government contracts, insider trading – it all probably makes the business student wonder if anything is done properly or legally anymore, or that perhaps their education was missing this "real world" element. Could you imagine courses such as: "Directed Readings in Deceptive Accounting Practices." We soon may see it. As a result, the credibility of business leaders is at an all time low. One recent survey reported that only 20% of Americans believe what I – as a CEO – have to say. Let me quickly say that I appreciate the attention that one in five of you are now giving me.
 
According to another survey, 62% of Americans believe that corporate CEOs are not doing enough to restore confidence in American business. And, finally, one other ranking places the credibility of CEOs somewhere between used car salesmen and chiropractors. Clearly, we have a problem. And we should also remember that it is one associated with enormous costs. Part of the cost, of course, are the direct tangible dollars of loss associated with various mis-deeds: $600 million in squandered spending at Tyco, or $850 million of losses at the California Teacher's Pension Fund due to World Com's deceptive accounting practices. Thousands of people lost not just their jobs but their life savings because of the Enron's of this country.
 
A second category of cost cannot be so easily measured. It is the cost associated with the lost trust and confidence manifested in those surveys I mentioned a moment ago. The American democratic capitalistic system is far and away the greatest and most successful governmental and economic model ever created in the world. But these scandals and issues tear at our moral and ethical fabric and erode our ability to lead. This has been real.
 
Finally, some would say there is a third cost to these recent events. And that is the cost associated with making sure these events do not occur again. This includes the cost to business of complying with the swath of legislative and regulatory reform that has been imposed on Corporate America. This includes, most prominently, the Sarbanes-Oxley Act, which requires large public companies like mine to spend millions of dollars annually to document, test, and certify that our business process, internal controls, and financial information are accurate, subject to outside attestation. And it backs these new requirements up with tough civil and criminal penalties.
 
At our Bank, we are spending millions of dollars annually, have hired numerous new staff, invested further in outside consultants and new systems, and have members of current management spending considerable time on these activities. And this will continue for the foreseeable future. For those of you out there who aspire to a career in accounting and auditing, let me just say, You Rule! Believe it or not, you will have the glamour jobs of the business world, circa 2004 at least. Or if not glamorous, these positions will at least be plentiful.
 
Now, I know many complain that these new rules and requirements are costly and unnecessary – needlessly penalizing the great majority of honest companies operating today. And there are good reasons to wonder at times whether the principles of proportion and reasonableness are being violated, stifling creative, innovative business activity I personally think there are good reasons to worry about this but, in this case, I also think the cost is worth the benefit. It is the price we must pay in this country to convince people that our economic system is clean, fair and credible, and that investors have a fair shake. When excesses occur, a cleansing is required. And that is what Sarbanes-Oxley, new SEC rules, new NYSE standards, and the like, are providing.
 
Whatever your own point of view on the above may be, this is the context you are now entering as business professionals and future business leaders. And it warrants a moment's reflection, at least, as to what your and your classmate's responsibilities are to your company and to your community.
 
I'd like to close today by offering some brief thoughts on this matter, based on my own career and observations. I do so with some trepidation because I hardly qualify for Sainthood. Just ask my wife of nearly 25 years or my 80-year-old mother! But I do have a few principles that I have tried to faithfully follow, and which, if everyone acted on, would result in a better qualify of life and standard of living for all of us.
 
First, always try to share accurately the factual details of any situation with those you are communicating with, whether those inside your company or those outside. When a thorny issue arise in my Bank, with different points of view on how to deal with it, I often say "let's start with the facts and work back from there": Perhaps Mark Twain said it even better: "always tell the truth, so you don't have to remember anything else."
 
It sounds simple – even trite. "Tell the truth". But the fact is that, while outright lies and deception are fortunately, I believe, still the great exception, we do live in an era where deliberate obfuscation, ambiguity, euphemisms, and spin supplant directness, openness and candor. Multi-million dollar executive birthday parties in the Mediterranean get written off as legitimate business expenses.
 
Physical abuse of prisoners is just fraternity hazing gone a little overheated. Tax increases become revenue enhancements. No wonder cynicism abounds.
 
My second admonition to you is that wherever, you work, make sure you have a mission you can believe in. At the Federal Home Loan Bank of Atlanta, we are fortunate in that regard. We are a private company created by Congress in 1932 to provide funding and liquidity in support of the nation's housing market. It is a mission that continues today as we support both market-rate mortgage financing and the affordable housing needs of low and moderate income Americans.
 
This mission makes it easy for me and my fellow employees to go to work each day and believe that what we do makes a difference. I realize that not all companies have such a direct social dimension in their charter. But whether your employer is providing food products, consumer goods, energy services, or lawn and garden equipment, you are personally providing a valuable service for people. And this context, I believe, is the most valuable dimension of your work, not an excessive focus on the day-to-day condition of your balance sheet or income statement. Keep a focus on your mission and its benefits to society.
 
Third and finally, make certain you and your employer give back to the community in which you work. This is another area where I am particularly proud of our Bank. We created in 1997 a Community Involvement Program that is employee driven and that resulted last year, for example, in over 7,000 volunteer hours donated to 157 non-profit organizations, and nearly half a million dollars in contributions and donations to various causes. We provide the equivalent of three days per year of paid leave to each of our employees to volunteer to community volunteer activities.
 
Of course, many companies are outstanding community citizens. But many others do too little. And this is an area where you will be able to provide leadership over time and shape the efforts of wherever you work.
 
In closing, let me urge you to do your part to restore and build trust in the greatest system and society in the world. We need it today more than anytime then in at least the last 35 years. Trust begins with our leaders. It is a form of capital that is priceless. You need to honor it and protect it as your best asset. In the process, it will free your minds – and those of your future colleagues and associates – to create the products and services, and to provide the inspiration, to build our country to ever-greater heights.
 
 
Thank you.
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