On Thursday, during the first event of AEI's new Culture of Competition CEO Series, former BB&T Corporation CEO and current Cato President John Allison presented the ethical business principles that kept BB&T focused on long-term value for its customers. Rather than using government programs to create short-term stock increases, emphasized Allison, BB&T sought to create long-lasting relationships in the communities served by the bank, and at times went head-to-head with regulators and government officials to push for sound banking policy.
Allison attributed BB&T's anti-cronyism tendencies to its management training, which underscores the importance of ethics and creating meaningful work for employees. By striving to live according to BB&T's governing principles, said Allison, managers have the freedom to serve their customers in ways that best fit their needs instead of working for higher stock value.
He stressed that in cases when government regulation interfered with customers' long-term interests, the bank focused on compliance, but also lobbied for changes to the rule. Allison concluded by emphasizing that considering BB&T was the only bank that remained profitable for every quarter during the US financial crisis and recession, the bank's commitment to market principles affirms the superiority of free enterprise over cronyism and special privileges.
As political connections increasingly determine economic success, how should a principled, free-market CEO lead? AEI’s new Culture of Competition CEO Series will explore this important question. In this keynote, Cato Institute President and CEO John Allison will discuss his time as chairman and CEO of BB&T Corporation, America’s 10th-largest financial services holding company.
As BB&T’s leader during a period of immense growth, Allison consistently stood for markets over special favors. Based on the experiences detailed in his latest book, “The Financial Crisis and the Free Market Cure: Why Pure Capitalism is the World Economy's Only Hope” (McGraw-Hill, 2012), Allison will address the temptations created by government incentives and the principles that kept BB&T focused on true value creation rather than easy, unsustainable profits.
If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.