Doing the Right Thing
First published in the EAEL 4th quarter newsletter
Have you ever witnessed any of the following scenarios?
- Sales
reps forging a lessees PG?
- Sales
reps teaching a vendor how to cheat to get a deal approved?
- Leasing
companies that refuse to refund a security deposit?
- Leasing
companies charging exorbitant upfront fees?
- Leasing
companies delaying payment to the vendor for their own benefit?
- Sales
reps increasing the length of time the lessee has been in business on an
application?
- Sales
reps selling the deal as $1.00 out to the lessee and then booking the deal
as an FMV?
Theoretically, most leasing sales people oppose unethical
behavior because they know that it’s wrong.
In real life many leasing sales reps will not disclose
upfront fees and back end policies because they are afraid of losing the
deal. They say to themselves “Get the
deal, and then let the lessee find out.
At least I got a deal on the books!”
When a credit analyst goes to decision a tough deal, sales
reps don’t sit there thinking “I hope they’ll make the right decision.” They pray that the deal gets approved. Is it bad to pray that all your deals get
approved? No. Is it bad to put your own individual
interests ahead of what is good for your company and your customers? Absolutely.
The EAEL includes in its mission statement … “developing and
encouraging the practice of high standards of personal and professional conduct
among executives serving in the equipment leasing field.” However, ethics in leasing, from my
experience, is not the most popular of topical discussion at leasing
conferences. Yet, if a leasing companies
reputation is being examined, its integrity and forthrightness to its lessees
becomes a debate open to professional observation and judgment. That is exactly what ethics and doing the
right thing is all about.
As leasing professionals we are responsible for being
advocates of good business practices. It’s
essential that we play by the rules to grow our business and help our vendors
and lessees grow their businesses. The
best way to raise the ethics of any leasing company is to set the right example
at the highest levels of the organization.
Christopher Cox, the chairman of the United States Securities and
Exchange Commission said “Without a doubt, the best practice in any company is to
set the right tone at the top. Over and
over again, commissioners and staff at the SEC observe that tone at the top is
a major factor in determining the effectiveness of internal controls to prevent
fraud, in treating customers, employees, investors and other stakeholders
fairly, in contributing to the long-term success of the organization. Leadership by example, good communication,
and ongoing ethics education and training are vital.”
Some common ethics violations, like portraying a lessee as better
credit risks then they actually are, occur on a regular basis. The reason for this is that the leasing sales
person wants to advance their own volume and commission at the expense of the
funding source or the lessee. Otherwise
responsible sales reps rationalize unethical behavior by focusing on their own
month-end results instead of helping vendors and lessees grow their businesses.
I like to think about it this way…would you write a lease
for your mother? Would your mom get
unfairly billed, terrible customer service and ever greened at the end of her
term? Or, would your mom get good
customer service, a fair rate and notification that her lease was about to end?
As we get ready to enter into 2008, focus on helping your
customers and maintain your integrity in all that you do. Maybe you could imagine a reporter for the
Wall Street Journal always looking over your shoulder. If you acted unethically this reporter would
write about it for all to see. If we
could imagine the pain in advance we might act with the lessee and vendor’s
desires top of mind, and not just our own selfish motives.
Sometimes leasing sales people have not been trained
properly and don’t realize that they are participating in unethical
behavior. The solution is to provide training
for your employees in ethical decision making at all levels of your
organization.
Take the high road when training your employees and
communicating with your customers. It
will ultimately help your company and our industry as a whole.