The United Way, which evolved from the local community chests of the 1920 s, is a national organization that funnels funding to charities through a payroll deduction system. Ninety percent of all charitable payroll deductions in 1991 were for the United Way. This system, however, has been criticized as coercive. Bonuses, for example, were offered for achieving 100\% employee participation. Betty Beene, president of United Way of Tristate (New York, New Jersey, and Connecticut), commented, "If participation is 100 percent, it means someone has been coerced."758 Tristate discontinued the bonuses and arm-twisting. The article also revealed that one of the taxable spin-off companies Aramony had created to provide travel and bulk purchasing for United Way chapters had bought a \(\$ 430,000\) condominium in Manhattan and a \$125,000 apartment in Coral Gables, Florida, for his use. Another spin-off had hired Aramony's son, Robert Aramony, as its president. When Aramony's expenses and salary became public, Stanley C. Gault, chairman of Goodyear Tire \& Rubber Company, asked, "Where was the board? The outside auditors?"760 Aramony resigned after 15 chapters of the United Way threatened to withhold their annual dues to the national office. Said Robert O. Bothwell, executive director of the National Committee for Responsive Philanthropy, "I think it is obscene that he is making that kind of salary and asking people who are making \(\$ 10,000\) a year to give 5 percent of their income."761 In August 1992, the United Way board of directors hired Elaine Chao, the Peace Corps director, to replace William Aramony at a salary of \(\$ 195,000\), with no perks. \({ }^{762}\) She reduced staff from 275 to 185 and borrowed \$1.5 million to compensate for a decline in donations. By 1995, United Way donations had still not returned to their 1991 level of \(\$ 3.2\) billion. Ms. Chao has since left the United Way, served as director of the Peace Corps, and as secretary of labor for the Bush administration from 2001-2009. Ms. Chao is married to Republican U.S. Senator Mitch McConnell of Kentucky, and is currently Secretary of Transportation in the Trump Administration..........................

Discussion Questions 1. Was there anything unethical about Aramony's expenditures?
2. Was the board responsible for the expenditures?
3. Is the perception as important as the acts themselves?
4. If Aramony were a CEO of a for-profit firm, would your answers change?
5. What obstacles did Chao face as she assumed the United Way helm?
6. Do you think Aramony should have asked for his deferred compensation funds? Why would the board pay him those funds? What could boards do to limit compensation paid to CEOs who resign following misconduct at the company?