Ethics

2008

Audit Your Ethics

Current: An annual ethics audit is as important as an annual fiscal audit. It helps bring the association’s core values and ethics into focus and conveys the importance of sharing organizational values and ethics. The ethics audit likewise provides an opportunity to evaluate the extent to which the association’s daily performance complies with its code of ethics. (Read more...)

Evaluate Your Ethics Program

2007

Ethics Reigns

From the king of the company on down, ethical standards have to be set by example.

OCTOBER 2007: If there’s ever a situation where it’s best to lead by example, it’s ethics.

In a perfect world, ethics starts at the top and trickles down to the lowest ranks. Corporate executives don’t just talk the talk; they live it.

“One mistake leaders make is believing that just because the company’s mission, values and goals are posted on the walls, employees see them, buy into them, and practice them in their daily activities,” says Karla Robertson, president of Shifting Gears, a business coaching and consulting company. (Read more...)

High-Integrity Management and Fraud Prevention: The Wrong Way

JULY 2007: "Show those numbers to the damn auditors and I'll throw you out the [expletive] window." This is how the accounting director at WorldCom responded to an accountant inquiring about an odd discrepancy. From 1999 though 2002, WorldCom booked more than $9 billion in false accounting entries at the direction of upper management.

Bernard Ebbers, CEO, fed Wall Street expectations of double-digit growth despite having received internal information contradicting his projections. As true profits declined, CFO Scott Sullivan orchestrated the booking of false accounting entries to make the financial statements look as though the company had achieved its goals. Several accountants were aware that the entries were unethical, but they still booked the entries and failed to do anything other than complain about why their supervisors were not taking action. Because executives were directing the fraud, most of the accountants rightly believed they would lose their jobs if they reported concerns. (Read more...)

Rules of behavior: the adoption of a code of conduct is a step toward improving the ethical culture in today's business world

JUNE 2007: EVERY ORGANIZATION HAS ITS OWN ethical philosophy, which reflects the values embodied in the company's culture and is enforced by senior management's behaviors and leadership style. It is of utmost importance that the organization formally commits itself to this philosophy by documenting it in a code of conduct and taking responsibility toward the general public for compliance with the code over time. The adoption of a code of conduct is a fundamental step in the attempt to improve the ethical culture in today's business world and, more specifically, to prevent unethical and fraudulent behavior within the organization. (Read more...)

2006

Keeping the company clean: internal auditors who conduct ethics audits can help prevent inappropriate activities from being swept under the rug and ensure the organization's reputation remains spotless

DECEMBER 2006: CORPORATE ETHICS IS A SLIPPERY BEAST, confounding, as it does, internal auditors' efforts to label it, track it, and participate in managing it. Conceptual issues such as tone at the top, standards of ethical corporate behavior, and assurances that employees act appropriately may now be enshrined in U.S. federal law, courtesy of the U.S. Sarbanes-Oxley Act of 2002, but that doesn't make them any easier for internal auditors to get their arms around. Indeed, in a recent survey conducted by The IIA's Global Audit Information Network, almost 15 percent of internal auditors said they don't perform ethics audits because they're "too hard." Another 39 percent said that ethics audits aren't part of their mandate or that they're simply not the internal auditor's job. (Read more...)

Creating an Ethical Culture

More Than Just a Warm, Fuzzy Feeling

OCTOBER 2006 - Managers focused primarily on the bottom line tend to marginalize the discussion of ethics by shrugging their shoulders and insisting that “you can’t teach ethics.” What they really mean is that you can’t teach values. Although each individual’s moral compass is shaped by countless experiences over a lifetime—family, culture, friends, education, and religion—many organizations have established a code of conduct to guide their employees regarding their ethical responsibilities. An employee who departs from this guidance may have the burden of justifying such a departure in a disciplinary or legal proceeding. (Read more...)

Creating and Sustaining an Ethical Workplace

SEPTEMBER 2006: The role of the risk manager is central to preventing and limiting the physical, financial and reputational damage to an enterprise that results lrom unethical behavior. The business case for a comprehensive ethics program is rooted in compliance requirements, a developing consensus that a strong ethical culture yields long term organizational success, and the urgent awareness of the cost and fragility of reputation. Risk managers play a key role in creating and sustaining an ethical workplace based on their mandate to control risk and their strategic and tactical skills to assess exposures, develop new procedures, measure outcomes and monitor compliance. (Read more...)

Keeping the company clean: internal auditors who conduct ethics audits can help prevent inappropriate activities from being swept under the rug and ensure the organization's reputation remains spotless

AUGUST 2006: CORPORATE ETHICS IS A SLIPPERY BEAST, confounding, as it does, internal auditors' efforts to label it, track it, and participate in managing it. Conceptual issues such as tone at the top, standards of ethical corporate behavior, and assurances that employees act appropriately may now be enshrined in U.S. federal law, courtesy of the U.S. Sarbanes-Oxley Act of 2002, but that doesn't make them any easier for internal auditors to get their arms around. Indeed, in a recent survey conducted by The IIA's Global Audit Information Network, almost 15 percent of internal auditors said they don't perform ethics audits because they're "too hard." Another 39 percent said that ethics audits aren't part of their mandate or that they're simply not the internal auditor's job. (Read more...)

Beyond Sarbanes-Oxley

AUGUST 2006: In 2006 we mark the fourth anniversary of passage of the Sarbanes-Oxley Act. More than any other piece of legislation affecting business in recent history, Sarbanes-Oxley has transformed the way companies and accounting and financial professionals operate. It has given us a platform for increased dialogue about ethics (or in some cases, a lack of them) within American companies. (Read more...)

How to Make an Ethics Program Work

APRIL 2006 - The authors’ experience studying corporate governance, oversight, and control has led them to the conclusion that a strong ethics program will not, by itself, ensure ethical behavior in organizations. It must always be supported by a strong system of checks and balances. Together, these two key ingredients can help produce a governance system that managements and boards can rely upon. (Read more...)

Ethics Keepers

JANUARY 2006: Back in the 1970s and ’80s, shortly after he founded the Center for Business Ethics at Bentley College in Boston, W. Michael Hoffman urged his graduating students to ask job recruiters to see the company’s code of ethics.

The response? “The recruiters usually had no idea what they were talking about,” says Hoffman, a philosophy professor and the center’s executive director. (Read more...)

2005

Ethics as a strategy: successful ethics programs consist of a process that incorporates analysis of outcomes and continual improvement

OCTOBER 2005: THE CONCEPT OF ETHICS AS an integral component of business strategy was thrust into the spotlight with the Enronled wave of governance disasters and the passage of the U.S. Sarbanes-Oxley Act of 2002. In the three years since Sarbanes-Oxley was enacted, scandals continue to surface and organizations around the globe are facing new mandates, standards, and increased stake-holder expectations. They are being challenged to address these issues in a way that supports performance objectives, sustains value, and protects the organization's reputation. (Read more...)

Now Is the Time for Ethics in Education

JUNE 2005: Recent corporate accounting scandals have brought ethics back into the limelight. The sight of CEOs and CFOs parading into courtrooms has raised public awareness and concern about ethical behavior in management and accounting. (Read more...)

2004

Ethics for Sale

NOVEMBER 2004: Most chief executives say they are ethical people and that they run ethical organizations. But a vast new industry worth hundreds of millions of dollars is springing up to help companies be ethical…quote; whether they need it or not. The captains of this new ethics industry include lawyers, auditors, psychologists, academics, Web masters, video makers and management consultants. Its product is ethics advice. Its fees are steep. And its targeted customer is the CEO. (Read more...)

How to Foster Fraud - Forget Ethics

AUGUST 2004: One of the most powerful ways to protect your company against fraud is to implement a written ethics policy that defines fraudulent behaviour and imposes a no-tolerance standard for such behaviour.

Unfortunate: Very few companies actually live by an executive-led standard of behaviour that infuses the organization with a culture of integrity…of zero tolerance regarding deception, cheating, theft and any other form of wrongdoing…and of respect for one another, for the organization and for its customers.

Instead, many organizations rely on employees'" common sense" about what is fair and ethical business behaviour. Or worse they tolerate an “everybody does it” attitude among employees. (Read more...)