Corporate Ethics: The barrel is rotten not the apples

Unethical corporate behavior does not begin and end at the executive level. All employees of businesses are capable of making unethical business choices. Most recently, studies have been conducted to examine how this behavior can be eradicated from the corporate structure. This week, I entered the blogosphere once again and found two blogs that discuss current dilemmas concerning the integration of ethics into corporations. In the blog "Governance Focus," author Onesimo Alvarez-Moro, a 20-year veteran of international investment banking, stresses the need for universities to incorporate ethics training not only as an introduction course in his post "Teaching Business Ethics: A critical need." The second blog I commented on is by Leon Gettier, a senior journalist at the Australian business journal The Age. His blog, "SOX First" focuses on the Sarbanes-Oxley Act and its integration into businesses. More specifically in his post, "Ethics Watch," Gettier comments on the great corporate illusion of ethical codes.

Comment:

Thank you for bringing this issue to light. Teaching "ethics and responsible behavior" is crucial to equipping students as they graduate and move into the business world. However, I believe ethics is more than just a class or a curriculum. Ethics is a habit and a way of life. Most people are able to recognize what is right and wrong in life. Yet making ethical decisions is often complicated when employees are challenged with pressure from executives, confronted with added monetary bonuses for covering up issues, or burdened with peer pressure. The Institute for Corporate Ethics, comprised of CEO's from top Fortune 500 companies, has generated a report, urging university business schools to develop ethical leadership classes and divisions, emphasizing ethics as a core discipline of business. "The best metric for assessing the worth of business schools is whether or not we are preparing emerging leaders to be good creators and stewards of value." The University of Southern California is at the forefront of student awareness on ethical education. The performing arts center adapted a new play "The Voysey Inheritance," a retelling of Victorian business ethics that "rings with echoes of modern-day corporate excess." Let's hope other universities can follow this trend and maybe take it to the classsroom soon.

Comment:

First of all, I want to applaud your blog and your most recent post. I would like to expand on some of the issues you address concerning enforcement of codes of ethics. The CFO's Europe Research study that you name says that because America has criminal penalties involved with unethical practices, "American companies seem to have in place more ethical laws." However, ethical laws are not the issue. The federal government has the Sarbanes-Oxley, Whistle blowing acts, the Ethics Commissions, and the FBI. CFO's "are the keepers of the corporate conscience," however ethics need to come from the ground up in an organization. Enron, WorldCom-they have the codes merely to serve as smoke and mirrors. What corporate America needs is a movement for restructuring the business pyramid, starting with educating employees on the importance of ethics from the onset of employment. BusinessWeek columnist Vivek Wadhwa argues "'company leaders' reinforce corporate values by making these an integral part of how success is measured and rewarded. Performance reviews and bonuses tied to corporate goals can be very effective." The issue does lie in the barrel, not the apples. Corporations need reform from the ground up.