Ethics Today Online
Volume 1, Issue 1, September 2002

This newsletter is published by the Ethics Resource Center.
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** A Word from the President
** The Bottom Line Is Integrity
** Fixing the Rules Is Not Fixing the Problem
** How to Avoid Being the Next Enron
** Stuart's Corner: The Good Counsel of Poor Richard
** Poll: How Will Legislation Affect Corporate Scandal?
** Media Coverage and Publications
** News from the ERC
** Offering Our Thanks

** A Word from the President

This past year has been marked by tragic events that were almost unimaginable 52 weeks ago. Perhaps I should fill this section with my sense of outrage at the violations of a handful of unscrupulous and reckless executives. However, as September approaches it all seems dwarfed by the anniversary of one of the most heinous acts that I have seen in my lifetime. It is hard for me to think of much else than the senselessness and barbarity of the loss of life at the World Trade Center, the Pentagon and that lonely field in Pennsylvania. It is perhaps fruitless to rail against madmen, because the world seems to continue to produce them in steady numbers. In every generation, some part of the world seems to be confronted with violent obscenities that shake our very sense of what it means to be human.

Yet on this most terrible anniversary, I find myself drawn back to a single sentence by Anne Frank in a Diary of a Young Girl. "I believe people are essentially good," she wrote, while recognizing her imminent death. How innocent, yet terribly profound. In doing ethics at the ERC I believe we work to uncover that essential goodness in people. As Benjamin Franklin agreed: "Most people want to be good..." When the forces of madness feel like they are going to envelop us, it helps to remember that we have the power to work against it. We all have that obligation. And there is much work to be done.

Stuart Gilman, Ph.D.

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** The Bottom Line Is Integrity

You can't legislate ethics. The requirement of CEO financial certification that went into effect in August, while necessary, certainly isn't sufficient. It may in the short run deter some less scrupulous individuals from corruption. But it would be naive to believe that in the long run, unethical individuals will not find a way around these new rules. What will make a difference will be the ethical character of corporate leadership, not a forest of new laws and regulations. Read the rest of this story

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** Fixing the Rules Is Not Fixing the Problem

The nation's leading thinkers in corporate ethics agree that in the wake of recent corporate debacles, fixing the rules and doubling the penalties is not fixing the problem. "If we are to prevent these incidents from happening again, the real issue we should be examining is personal and organizational integrity," says Stephen Potts, Chairman of the Ethics Resource Center (ERC) Fellows Program and former Director, U.S. Office of Government Ethics. "Upholding the rules in an organization requires a strong ethical compass from both leaders and employees." Read the rest of this story

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** Ten Things a Company Can Do to Avoid Being the Next Enron

From examining your ethical climate and keeping the lines of communication open, to remembering and adhering to the seven main provisions of the Federal Sentencing Guidelines of 1991, this article sets out ten things your company can do to avoid the fate of Enron and other companies whose ethics are called into question. Read the rest of this story.

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** Opinion Poll: How Legislation Affects Corporate Scandal

What do you think? If the recent corporate scandals result in more restrictive legislation, do you think it will reduce unethical conduct? Take our informal poll.

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** Stuart's Corner: The Good Counsel of Poor Richard

ERC President Stuart Gilman regularly comments on books and other items with an eye toward how they relate to ethics, integrity and the mission of the ERC. This month he describes how he found a description of "The Art of the Virtue," written more than two centuries ago by Benjamin Franklin, to be a remarkably fitting depiction of the work of the Ethics Resource Center today. Read the rest of this story.

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** Media Coverage and Publications

-- ERC President Stuart Gilman did an on-camera interview for Newschannel 8 to discuss corporate reform with lawyers. The show, First Business, aired August 13, 2002.

-- Stuart was also quoted in an article by John Finer in The Washington Post Business Section on August 9, 2002. Here is an expanded version of what he said: "My argument was that the SEC is under such heavy scrutiny that the commissioners should take every advantage of assuring the public in the integrity of the process. The law does not require them to recuse themselves, because they have already divested. However, the spirit of the law (and the Standards of Conduct rules on impartiality) strongly suggest that a public official's responsibility goes beyond obeying the law, it also goes to assuring the public in the impartiality of government institutions. In that case, participating in an investigative process of a company in which you had a large holding (and sold for a significant profit before it went belly up) might appear to prejudice you in the eyes of the average citizen. As such, a person armed with all of the facts might conclude a commissioner's participation to be problematic." Read the full article.

-- Frank Vogl, a member of the ERC Board of Directors, was a featured guest on the Diane Rehm Show on National Public Radio on August 1, 2002. Listen to a RealAudio recording.

-- "Integrating Business Ethics and Compliance Programs" by Joshua Joseph, ERC's research manager, will be published in the next issue of the Business and Society Review (August/September 2002). Get a copy of the study (funded by the ERC Fellows Program) on which the article is based.

-- Josh was also quoted in an article entitled "Research Employer's Ethics Code" in The New Jersey Star Ledger, which emphasized the importance of finding out about a prospective employer's ethical climate before taking a job with them. Read the full article.

-- W. Lee Van Weer, director of advisory services, published "The Day I Became an HR Professional" in the Summer 2002 issue of NEHRA's Insight magazine. This article discusses the difficult issues managers face when status and questionable ethics collide.

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** News from the ERC

• During the last month, the ERC continued its practice of hosting groups of international visitors. Individuals participating in both State Department and USAID visitors programs came to the ERC for briefings on the work of the Center and an overview of business ethics and anti-corruption strategies. A Russian delegation of government and civil society leaders and a journalist from Japan's leading daily, Nihon Keizai Shimbun, attended these presentations which focused particularly on how those issues play out in developing or transitioning countries. A Japanese professor of business ethics also visited the ERC in order to learn more about current best practices in corporate America. Learn more about the ERC's international programs.
• ERC staff shared a program at the Institute of International Education with the Transnational Crime and Corruption Center of American University. Together, they addressed a group of NGO representatives from South Asia in a lively roundtable discussion on ethics and corruption issues facing that region.
• The Character Development department has expanded the MAXIMize the Moment program. In addition to the second year of its program for secondary students and their families, the ERC now offers MAXIMize the Moment Junior and MAXIMize Your Family Time Junior for third through sixth grade students and their families. Learn more about these programs.
• The ERC extends a warm welcome to two new members of the ERC Board of Directors: Robin Aram, Vice President, External Relations and Policy Development, Shell International Ltd. and Jose Berrios, Vice President of Staffing & Diversity of Gannett Corporation
  
  -- Mr. Aram, who resides in London, joined Shell UK Ltd. in 1990, and assumed his present position at Shell International Ltd. in 1995. Previously he served as a research fellow for the UK Department of Trade and Industry, the UK Cabinet Office, Economic Secretariat, and the UK Department of the Environment.
  
  -- Mr. Berrios is responsible for directing Gannett's corporate HR programs and strategies including the company's executive recruiting and staffing program for over 90 daily newspapers and 20 television stations at more than 100 U.S. locations. He also directs the company's nationally-recognized diversity initiative. Gannett's diversity initiatives include communication strategies (award-winning video, newsletter and Intranet site), staffing and retention strategies, leadership development, diversity training, management accountability and diversity committees at Gannett locations.
• In July, the ERC Board of Directors participated in a two day retreat to discuss the strategic direction of the ERC. The ERC Board of Directors consists of prominent global executives in both the private and public sectors. View the list of Board members.
• The ERC Fellows met in Washington July 17-19, 2002. Featured speakers included: Norm Augustine, former chairman and CEO of Lockheed Martin Corporation and founding chairman of the ERC Fellows Program; Chuck Bowsher, former comptroller general of the U.S. and member of the Volcker Commission that conducted an internal investigation of Arthur Andersen's recent challenges surrounding the Enron crisis; Paula Desio, deputy general counsel of the U.S. Sentencing Commission; The Honorable Amy Comstock, director of the U.S. Office of Government Ethics; Amanda Tucker, Director of Compliance at Nike; Jim Copeland, CEO of Deloitte & Touche Worldwide; and Rod Hills, former Chairman of the SEC. Learn more about the ERC Fellows Program.
• Gigi Ledkovsky joined the Ethics Resource Center in August 2002 as director of development. Her previous position was director of development at BoardSource, formerly the National Center for Nonprofit boards, a governance training organization dedicated to building stronger nonprofit boards. The natural synergy between BoardSource and the Ethics Resource Center in the areas of consulting, training, research and international work offers exciting opportunities for future collaboration. Read more about Gigi's background and experience.
• Jerry O'Brien, director of international programs and finance is leaving the ERC in September 2002 to take a position with USAID. Jerry has been with the ERC for six years and has been a critical force in the development of ethics or integrity centers in other parts of the world.
• The ERC web site has been completely overhauled and now includes more resources and interactive features as well as improved navigation. Visit us online at and let us know what you think!

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** Offering Our Thanks

As a nonprofit organization, the Ethics Resource Center depends on contributions from many generous donors. Without their dedication and trust, many of the programs and projects highlighted in this newsletter would not be possible. The ERC would like to thank the following for their recent contributions:

• The Merck Company Foundation, increased general support for ERC and increased funding for the international ethics centers we work with around the world.
• The Johnson and Johnson Family of Companies, for general support
• The Kiplinger Foundation, for general support

We invite you to join our loyal contributors in lending your support. Find out how to contribute or to donate online

The Ethics Resource Center (ERC) is a non-profit, non-partisan educational organization exempt from taxation under the Section 501(c)(3) of the Internal Revenue Code. All gifts are tax-deductible to the fullest extent of the law.

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