Falling on the Sword

The Japanese have an interesting custom: When a scandal or an embarrassingly serious situation occurs, the senior executive in the government or business atones for the transgression by “falling on his sword.” In other words, he accepts responsibility for the event and resigns. This act of contrition presumably washes the slate clean.

There is currently a scandal surrounding the Gemological Institute of America, where GIA employees have been terminated for allegedly taking bribes to give diamonds higher grades than they deserved. As a result, Tom Yonelunas, the CEOof GIA’s New York gem-grading lab, resigned as of the end of December.

We in the jewelry industry talk about trust frequently. It is the sine qua non with which we operate. We trust buyers, manufacturing managers, accountants, product managers, editors, and presidents to execute their responsibilities honestly. When they do not, it is appropriate that they pay the price for malfeasance. That price is termination and perhaps prosecution. Where misfeasance is involved, the judgment call is more complicated. For gross misfeasance, the individual may suffer the same result. It is a question of judgment.

I will state for the record that I am an admirer of GIA. GIA has contributed greatly to the jewelry industry. Diamond grading, education, a passion for excellence as well as a first-rate money-raising machine for the continuation of GIA’s mission are just a few of its accomplishments.

The wrongdoing in the present situation has been attributed to individuals who allegedly accepted money in return for either changing or improving the grade of diamonds. Yonelunas has not been accused of participating in this misadventure. To the contrary, GIA has made it clear that Yonelunas’s integrity is not at issue. Yet his nearly 30-year career at GIA has been forfeit as a result of the present situation. GIA has also made it clear that security steps will be taken—specifically, the appointment of an ethics czar—to assure that no such event will take place again.

It seems wrong to me that an individual should be held responsible for the illegal acts of others. It’s also naïve to think that GIA can protect itself from a similar event in the future by replacing Yonelunas with someone else in the organization, installing an ethics czar, and presenting a strong ethics policy statement to employees. Someone intent on wrongdoing will find a way. A strict ethics policy did not prevent a senior executive at Wal-Mart from illegally using company funds to allegedly counter union- organizing attempts. In that case, the executive was relieved of his duties and the CEO remained in place.

At the annual dinner of the National Conference for Community and Justice, Yonelunas was honored and twice received a standing ovation from a significant number of attendees. So it seems that many might agree that his departure from GIA was unnecessary.

Making Tom Yonelunas fall on his sword is a waste of talent.


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