Daily Lessons from Life 25 April 2011 - Sinopec demotes top executive after booze binge

"Mon, Apr 25, 2011 Reuters - Sinopec demotes top executive after booze binge

BEIJING, CHINA - Chinese oil refining giant Sinopec has demoted a top executive who bought 1.6 million yuan (S$302,375) of wine and spirits after details of the purchase leaked onto the Internet and sparked an uproar over extravagance at the state-owned firm.

Sinopec, which is Asia's top refiner, said on Monday that it had demoted Lu Guangyu, who was general manager at the company's operations in the southern province of Guangdong, for "seriously harming Sinopec's image".

The company also fined Lu an unspecified sum and ordered him to pay back 130,000 yuan for alcohol he and his associates had already drunk, it said in a statement on its website (www.sinopecgroup.com).

His purchases included 480 bottles of Moutai, an expensive Chinese liquor traditionally drunk at state banquets, Sinopec said, adding it had re-sold bottles which had not already been drunk.

Some of the bottles cost almost 12,000 yuan each - far more than the average Chinese earns in a month.

State media and China's spirited internet users said the purchase of the alcohol, which was meant for internal company use, was especially galling considering how much gasoline and diesel prices had risen recently.

Many Chinese are also struggling to make ends meet as inflation climbs. Consumer prices rose 5.4 per cent in the year to March.

Sinopec Corp is the company's listed arm."

A case of intoxicating leadership? When the going is good, what is a few millios spent on spirits and wines? What is a few millions as a % of the net profit of a few billions?

Lessons for me are:

1. there is a limit to what the % of total measurement can work. Assessing the adequacy of one's compensation as a % of a nation's GDP or a company's profit or revenue that numbered in the multi-billions is a sure way to see, anything below 5% is immaterial! In absolute terms and in comparison to an ordinary worker or a honest wage earner's pay, it is definitely excessive and obscene! That is the truth that must be recognized by the 'statistician'!;

2. In my 7e Way of Leaders Ethics section, I argued that even paying oneself too much is an ethical problem, let alone deliberately using a demoniator that will show the % to be insignificant and therefore misleading. That is definitely unethical behavior! I also mentioend that 'successful leaders who are NOT humble will make the mistake of detaching oneself from the masses and reality'. For Mr Lu, the money must be well spent as the spirits and wines are the best of their classes and the 'management' deserved to saviour such fine things in life!;

3. when 'unethical' behaviors occurred, they will be found out. Not if but when they will be found out. Like the ancient Chinese saying: 'If you do not want people to find out something you had done, then do not do it in the first place!'. It is the best policy and guidling principle on how to behave ethically!

May Mr Lu be graceful enough to accep the punishment and may Sinopec continued to mete out punishment of great consequences to inform other would be offenders and 'such behavior will NOT be tolerated'!! That will do a world of good to repairing and keeping Sinopec's public image in the good light for many more years to come!!