Awards Planned : Trust Forms to Establish Standards for Business

A high-powered group of business executives, including investor Warren E. Buffett and television producer Norman Lear, announced an organization in Los Angeles on Monday to set standards for corporate behavior and reward “acts of courage, integrity and social vision.”

The group, calling itself Business Enterprise Trust, plans to conduct research on ethical issues facing corporations and to hand out “Spirit of Enterprise” awards to responsible individuals.

James E. Burke, retired chairman and chief executive of Johnson & Johnson and chairman of Business Enterprise Trust, said the organization wasn’t formed to dress up corporate America’s image in the wake of Wall Street’s long-running securities fraud and insider trading scandal.

Avoid Criticism

Rather, Burke said, the group is more concerned with the pressure that corporate executives feel to show short-term profit at the expense of the long-term needs of their businesses and society in general. “We want to encourage a long-range view and a careful examination of the choices facing business,” he said.

The group was started by Lear, producer of “All in the Family” and a founder of People for the American Way, a liberal activist group. “This is something that would have been appropriate at any time in the last 20 years,” said Lear, who is providing $1 million to get Business Enterprise Trust started.

Trying to maintain a positive tone, the group said it would steer clear of criticizing companies that don’t meet their standards. “Actual examples of praiseworthy behavior are more valuable than criticism,” said Kirk O. Hanson, president of the organization and a Palo Alto consultant on business ethics issues.

But during a news conference at the Century Plaza Hotel, Burke said he would have handled events surrounding the recent Exxon Valdez oil spill in Alaska differently. Exxon has been accused of moving slowly to clean up the massive amounts of oil that spilled into environmentally sensitive Prince William Sound after its tanker ran aground in March.

“Whether Larry Rawls (the chairman of Exxon) should have flown up to Alaska, I can’t say,” Burke said. “I would have handled it differently.”

Burke won praise in 1982 when, as chairman of Johnson & Johnson, he recalled Tylenol after cyanide-laced capsules killed seven people. Tylenol was reintroduced in “tamper-proof” packaging.

Directors of Business Enterprise Trust said they were searching for modern-day heroes who would be examples to young executives and to students at the nation’s business schools. Buffett, chairman of Berkshire Hathaway, quipped that the directors were looking for a successful businessman who “you would want to marry your daughter.”

Spokesmen for the group said they would look for their heroes throughout the ranks of management, or perhaps in research and development. The group said it was unlikely that a chairman or chief executive would win a prize.

But a number of the personal heroes of Business Enterprise Trust directors were, in fact, heads of their own companies. Asked to name a few outstanding business leaders from the past, directors mentioned David Packard, a Hewlett-Packard co-founder, and Robert Wood (General) Johnson, who took over J&J; in 1932 and built it into a pharmaceutical giant.

Business Enterprise Trust is based at Claremont College, and its directors also include John F. Akers, chairman of IBM; Robert A. Burnett, chairman of Meredith Corp.; William T. Coleman Jr., senior partner of O’Melveny & Myers; Peter F. Drucker, professor of business management at the Claremont Graduate School; Douglas A. Fraser, former president of United Auto Workers; Katherine Graham, chairman and chief executive of the Washington Post; Karen N. Horn, chairman and chief executive of Bank One; Sol M. Linowitz, senior counsel of Coudert Bros.; James T. Lynn, chairman and chief executive of Aetna Life & Casualty; John D. Maguire, president of Claremont University; Robert C. Maynard, editor and president of the Oakland Tribune; Robert B. Reich, management professor at Harvard University’s John F. Kennedy School of Government; Henry B. Schacht, chairman and chief executive of Cummins Engine Corp., and John A. Young, president and chief executive of Hewlett-Packard.