Soon-to-be former AOL Time Warner Inc. CEO Gerald Levin told a luncheon audience here last Thursday that a company has an obligation not only to shareholders but to insure it maintains a moral center.
Levin, speaking at the International Radio and Television Society Foundation's Newsmakers luncheon, said that moral directive was one reason he chose current AOL Time Warner co-chief operating officer Richard Parsons to succeed him.
Levin officially steps down at AOL Time Warner's annual meeting on May 16, when Parsons will assume the CEO role and current co-chief operating officer Robert Pittman will become sole COO.
"Some shareholders believe that corporations are formed for the sole purpose of rewarding their investors," Levin said. "As long as the company stays within its legal boundaries, the notion of maximizing profits is and must remain the all important priority."
Financial analysts, and some others, say business should just stick to business, he continued. "I can't tell you how much I profoundly disagree with that."
Levin said his views were grounded in those of Time Inc. founder Henry Luce and AOL Time Warner vice chairman and Turner Broadcasting Systems founder Ted Turner, who also created Cable News Network.
"Ted founded CNN with a similar charter — news comes first," Levin said.
Levin said Parsons has journalistic integrity and strong moral convictions. "I've watched Dick grow, and I've watched him internalize our values and demonstrate not only his mastery of our businesses, but his human concern for people."
Levin also fielded an audience question about his most and least rewarding business experiences.
"I once gave a speech to Wall Street where I listed all of the business decisions I made that lost money," Levin said. "It was a long speech.
"We started a home video club before the video cassette had been invented, so that was a mistake. We did the digital newsroom in 1981 that lost $25 million, but there weren't really home computers. And then there was the famous Vietnam failure of [the Full Service Network] interactive television in Orlando, where I learned most of what I now know.
"I mention this as a point," he said. "The low points, the presumed failures, are actually very important because it gives you a certain courage. I've always tried to encourage new, idiosyncratic behavior."
The most rewarding was being in on the formation of Home Box Office Inc. "To be a part of the creation of a new medium is certainly the most exciting thing that I've done."