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Careers

In Tough Times, the Best CEOs Lead by Example

Cutbacks should start at the top before trickling down. Plus, why reputable media run questionable ads.

Q: My co-workers and I were told to cut travel expenses, but the boss still flies first-class. What do you think?

The best chief executives ask nothing of their troops that they aren't willing to do themselves and haven't done first.

They communicate with their employees at every step -- with clarity, candor and a vision of a better tomorrow. They freeze or cut their own salaries, bonuses and perks long before -- or ideally, instead of -- taking similar actions with their subordinates. Courageous CEOs suggest to the company's shareholders that they, the owners, tighten their own belts first by trimming or eliminating dividends to conserve capital.

And when the company returns to profitability, the most ethical bosses accept no accolades or bonuses if the turnaround was accomplished only by slashing costs or a general improvement in the economy. ThatÕs nothing for which a CEO should take special credit.

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Q: I'm hearing more and more advertisements on my local radio stations for "credit repair" and "foreclosure prevention" services. And CNN recently ran a commercial (for a foreclosure-assistance firm whose name sounds like a federal agency) that looked just like one of its own news reports, complete with video footage of President Obama. Consumer advocates say that most of these services are of questionable value, and some are outright scams. So why do reputable broadcast stations accept these ads?

Because most media outlets -- print publishers, TV and radio stations, cable systems, and Web sites -- are desperate for advertising revenue in this severe recession. They have lowered their ethical standards on the kinds of ads they will accept, and many media companies do minimal, if any, background checks on advertisers and their products.

(Here at Kiplinger, we try to check out every new prospective advertiser, and we reject more ads than most publishers do.)

Have a money-and-ethics question you'd like answered in this column? write to Editor in Chief Knight Kiplinger at ethics@kiplinger.com.