|
 |
 |
| Publications: Ethics Today Archives |
|
|
|
|
|
Ethics
Today Online This newsletter
is published by the Ethics Resource Center.
**The President's Words: Character and Fate "A man's character is his fate" I recently had the privilege to testify before the Advisory Group reviewing the Federal Sentencing Guidelines for Organizations for the U.S. Sentencing Commission. The essence of my statement was that we ought to pay more attention to the culture of an organization rather than its structural attributes. Ethics offices, codes, whistleblower hotlines … all must be more than paper exercises. Function must become far more important than form. We must ensure that public and private organizations do the right thing as well as reward them for doing it the right way. As ERC President, I made the same argument to the Securities and Exchange Commission as they develop regulations arising from the Sarbanes-Oxley Act and the recent recommendations of the New York Stock Exchange. The point that I have made over and over again has been that we need to do more than create paperwork requirements. Rather, we should use the experiences of the last two years to understand and change the kind of ethical climates that prevent organizational integrity. The drawback to this argument is the two implications that seem to grow from it. First, it implies that all corporations are somehow deficient and are led by people who do not value ethics and integrity. Second, this in turn leads to a sort of cynicism that suggests it is futile to make any effort to improve organizations. Both of these conclusions are wrong. The ERC has worked with an incredibly impressive array of senior leaders from diverse sectors of the economy who are committed to ethics and integrity -- leaders who believe that integrity is what allows businesses to succeed and that the lack of ethics is ultimately the cause of many corporate failures. These men and women profoundly believe that a strong ethical culture is the wellspring of their success. In November I had the honor to participate in presenting the Stanley C. Pace Leadership in Ethics Award to Ira Lipman, President and Chairman of the Board of Guardsmark, LLC. I will not repeat the list of efforts that led to Ira's selection nor will I mention the multiple other honors he has received. Rather, I want to focus on his informal remarks upon accepting the award. Ira chose not to talk about what he did but rather what his employees did. His face lit up as he talked about how proud he was of them. He explained how involved all of Guardsmark is in revising and reformulating their ethics standards annually and how important their culture was for all 18,000 employees. Integrity is their benchmark and success is their reward. Ira Lipman not only "walks the talk", he lives, breaths and inspires it. He believes in those who work with him because they share those same values. Certainly Ira deserved this award but there are many other leaders who share his vision. They understand that high ethical standards are one of the elements that lead to success and that, in fact, holding a moral compass in one hand is a positive way to ensure that one's character is one's fate. Stuart C. Gilman, President ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** Pace Leadership in Ethics Award Goes to Ira Lipman On November 14 at the Harvard Club in New York, the ERC presented the 2002 Stanley C. Pace Leadership in Ethics Award to Ira A. Lipman, President and Chairman of the Board of Guardsmark LLC, a leading security services firm. Created through an endowment from the General Dynamics Corporation to honor its former Chairman and CEO Stanley C. Pace, the award is presented annually to an individual who is widely known and recognized as a person of unwavering integrity and who has demonstrated ethical vision and the ability to translate that vision into specific goals. "Given the scandals this year in U.S. corporate governance, the Pace Award has particular importance and significance. Ira Lipman stands as an outstanding role model for business leaders across the nation," stated ERC President Stuart C. Gilman at the award ceremony. In accepting the award, Mr. Lipman said, "I believe that the companies that last, that build public trust and that secure employee and shareholder loyalty, are the companies that put integrity first. … This important award from the Ethics Resource Center honors the principles and approaches pursued every day by the 18,000 employees of our company." Read the press release at: Learn more about the Pace Award and
read the presentations at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** Federal Sentencing Guidelines for Organizations ERC President Stuart Gilman called on the official advisory group reviewing the U.S. Federal Sentencing Guidelines for Organizations (FSGO) to strengthen ethics leadership in US business. In testimony presented November 18, he noted "We are experiencing a crisis of trust and confidence today. In part we attribute this crisis to the belief that many hold regarding the value of the ethical minimum -- skating on the fine line of legal defensibility and turning one's back on the higher ethical principles." Stu urged the FSGO to approve concrete measures that will encourage corporations to adopt approaches that strengthen the corporate ethics leadership roles of chief executive officers, boards of directors and corporate ethics officers. He said these actions are consistent with the Sarbanes-Oxley Act of 2002, which requires executive leadership to attest to the integrity of their organizations' financial reporting and overall operations. Read the press release at: Read the written testimony at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** Ask the Expert: What is the benefit of a formal ethics policy? "My company does not have a formal ethics policy. One reason may be that the company is family owned and privately held and not subject to the stock market. What would be the benefit of having a formal ethics policy?" In his response, Principal Consultant Frank Navran discusses several issues that are relevant to many small and medium-size enterprises considering whether or not to adopt a formal ethics position. These include: 1. Do the elements of "an effective ethics program to prevent and detect [ethics and legal] violations..." as outlined in 1991 US Federal Sentencing Guidelines for Organizations (FSGO) only apply to publicly held corporations? 2. Does a small or medium size enterprise have to adopt the same mechanisms and systems as those employed by larger corporations? 3. What constitutes a "formal ethics policy?" 4. What are the benefits of a formal ethics policy? Read Frank's response at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** GCEE Transitions to Independent Arab Center on Organizational Ethics The Gulf Center for Excellence in Ethics (GCEE), based in Abu Dhabi, the capital city of the United Arab Emirates (UAE), was established in 1998 by the Ethics Resource Center (ERC) through a grant from the Merck Company Foundation. Its mission is to raise the level of awareness of issues of organizational ethics and assist UAE and Gulf region government and business organizations in the design and implementation of ethics programs. In May 2002, as a result of the GCEE's search for a local partner organization to lead the transition to independent status, the Dubai Executive Office, a government agency whose mission is to promote the social and economic development of the Emirate of Dubai, offered to sponsor the center. On October 27, the center was transferred to local ownership and administration was transferred to the Executive Office. To emphasize its expanded regional focus, the center has changed its name to "Arab Center on Organizational Ethics". The first activity of the center under its new leadership will be the convening of a regional roundtable on governance in April 2003 in collaboration with the Global Corporate Governance Forum (GCGF), a joint OECD/World Bank initiative. Read about the ERC's international
centers at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** ERC Trains International Visitors From November 6 to November 24, the ERC welcomed staff members from the new Arab Center for Organizational Ethics. Mohammad Amin Alemadi and Viviane Salim Zabbal, both of Dubai, and Malak Salahaddin Anabtawi of Jordan participated in an intensive three-week training course at ERC's Washington, DC, headquarters in preparation for their taking over management of the ethics center. The course commenced with discussion of theoretical and background issues including an introduction to organizational ethics and an overview of ERC's advisory services methodology The bulk of the program involved practical instruction on topics such as:
The final sessions gave the participants an opportunity to apply their training to a series of case problems. Principal Consultant Frank Navran provided much of the classroom training, with Research Manager Joshua Joseph conducting sessions on surveys and research, Consultant Ingrid Matuszewski providing insights on code development and other staff assisting with discussions and planning. The training program also included the following special presentations from outside experts:
Learn more about the ERC's international
training capabilities at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** Achieving Ethical Congruence Ethical conflict is not the telltale sign of an unethical company. Ethical conflict occurs in ethical companies that do not fully appreciate its origins and/or impact in the workplace. It is the legacy of leaders who believe that such conflict is inevitable. It is symptomatic of organizations that fail to take advantage of the full set of human potential for which they are already paying. Ethical conflict represents perhaps our greatest opportunity to increase organizational effectiveness by doing something positive for (and with) our employees. Ethical congruence is the organizational state where values, behaviors and perceptions are aligned, a state that can lead to increased quality, customer satisfaction, productivity, and employee commitment. This article by Principal Consultant Frank Navran describes some of the causes of destructive ethical conflict and uses case scenarios and action lists to guide organizations through the process of reducing that conflict in the workplace. Read the rest of this intriguing essay
at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** Making the Case in the Schools On November 8, Associate Consultant Tarek DeLavallade presented three sessions to 300 seniors from Seneca Valley High School during the Gaithersburg, MD, school's senior ethics day. The students split up into groups of 100 before participating in concurrent programs -- the ERC's case studies, an ethics survey by Booz-Allen Hamilton and a mock trial presented by the state attorney's office. Tarek started each session with a brief introduction to business ethics and ethical decision-making, then divided the students into 8-10 small groups. Each group received one of five different scenarios focusing on an ethical dilemma which might occur in the workplace, including:
With the guidance of a volunteer adult facilitator, the groups independently discussed their scenarios for 20 minutes using a model developed and used by Seneca Valley to help students resolve ethical issues. After the small group discussions, several groups presented their scenarios and resolutions to the larger group, who were encouraged to offer their suggestions and insights. The scenarios, developed in conjunction with the school and based on issues reported by students, included real life examples of issues that could arise in their current employment as well as later in their lives. Tarek noted that the majority of the students were enthusiastic and motivated and seemed interested in learning and practicing a process for how to make better, more ethical decisions by examining the facts, alternatives, impact, results and ethics involved in a situation. The ERC has worked with Seneca Valley on character education issues since 1997. ERC is discussing conducting similar sessions with other schools, often in conjunction with school "Ethics Days", a concept that is becoming more popular with schools seeking to assist their students as they move from school to work. Learn more about ERC's character education
programs at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ **Opinion Poll: Who would you honor for being ethical? If you were to give an award to someone in your organization for ethical behavior, to whom would you give it? Take our December poll at: Last Month's Poll: In November we asked whether, given the recent discussions about the independence of company boards of directors, readers thought it was appropriate for the same person to hold the positions of Chairman of the Board and Chief Executive Officer for the same corporation? 64% said it is not appropriate, 10% said it is and 26% said "it depends". See the results of last month's poll
at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** How HR and Training Impact Corporate Responsibility On October 29,Director of Advisory Services Lee WanVeer participated in an SHRM/ASTD virtual media event "How HR and Training Impact Corporate Responsibility". His presentation "The Good, Bad and the Ugly: How Corporations Foster Ethical Business Practices" is now available online, along with those of co-participants Rita Bailey, Former Director of the University for People, Southwest Airlines, and Judy Streeter, PHR, Senior Vice President of Human Resources for North American Lodging Operations of Marriott International, Inc. In his part of the webcast Lee noted that recent studies, including the ERC's 2000 National Business Ethics Survey, show that while people generally don't trust corporate executives these days, employees do trust their own organizations to communicate openly and act fairly. The human resource and training functions have a vital role to play in communicating organizational culture, shared values, and expectations of behavior to ensure that employees act and work in a responsible manner. Listen to the archived webcast at: Please note: The conference is provided free of charge but you will be asked to enter a small amount of information into the "guest book" of the third party producer. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** Media Coverage and Publications -- Director of Advisory Services Lee WanVeer was interviewed for a November 10 Washington Post article entitled "But It Was Only a Few Pens, Officer" which discussed how minor ethical lapses can breed a corporate culture that is accepting of more egregious infractions. WanVeer noted that little infractions can gradually lead to larger breaches in ethics. "It is the small things that can become commonplace that create a culture of acceptance in the name of expediency or customer service," said WanVeer. That can lead to larger infractions, he explained, which was the case at WorldCom and Enron. "You have to be wary of rationalizations," WanVeer said, noting "the little lies we tell ourselves to give ourselves permission to do what is wrong" can cause major damage. Read the story at: -- Research Manager Joshua Joseph was quoted extensively in a Chicago Tribune article discussing the proposed SEC rules that require public companies to adopt and publish codes of ethics for their chief executive, chief financial officer and top accounting executive. ERC Fellows Gale Andrews of Boeing and Laura Hartman of DePaul University were also interviewed for the story that focused on the impact of corporate culture on the effectiveness of ethics rules. In order for an ethics code to succeed, it needs the support in words and deeds of a committed leadership. "You really have to demonstrate to employees that this is different, and you have to do it in a way that employees buy into it," Josh said. He and the others also pointed out that while the rule will prompt firms without policies to adopt them, it also provides a minimum standard that some firms will use for cover. Read the story at: -- Managing Director Pat Harned was interviewed for two stories in the Las Vegas Review Journal regarding the teaching of ethics in business schools. The first story, "Workplace Behavior: The Route of All Evil", discusses how one school has used the recent scandals to prepare students to face ethical dilemmas when they join the business world. Richard Flaherty, dean of UNLV's College of Business, urged all faculty to determine how they could integrate lessons about ethics into what they teach so that students will be able to see and avoid ethical pitfalls. Read this story at: The second story, "Office Culture May Determine How Workers Exercise Ethics", focuses on the importance of lessons learned before college and social systems existing afterward. Pat commented on the impact of core values taught by parents and reinforced by schooling on a person's ability to act ethically or unethically. "The thing is to get students to see how ethics connect to every decision they make every day and are part of all aspects of the material they're learning," she said. "If we want to raise ethical business leaders, we should make ethics a primary part of what we teach children." Read this story at: -- Principal Consultant Frank Navran was interviewed for a story in the Institutional Shareholder Services "Friday Report" which appeared November 8. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** News from the ERC -- Alex Zalami, who over the last five years created and developed the Gulf Centre for Excellence in Ethics (GCEE) in the United Arab Emirates (UAE), has been appointed the ERC's International Programs Director based in Washington, DC. ERC President Stuart Gilman noted "Mr. Zalami has been a pioneer in creating a global network of ethics institutes, sponsored by the ERC with generous support from the Merck Foundation and others." Read the press release at: /releases/nr_20021203_zalami.html -- Development Director Gigi Ledkovsky moderated a presentation on "Recruiting for Diversity" at the 2002 BoardSource National Leadership Forum "Boards Building Community", November 17-19 in Washington, DC. Also appearing on the panel were health care consultant Catalina Vallejos Bartlett and Jacqueline M. Ebanks, a senior director at United Way of New York City. Gigi noted that while diversity is difference, it is not always visible and may include difference in race, culture, national origin, geography, gender, sexual orientation, age, marital status, religion, ethnicity, politics, socio-economic background, class, education, and family structure. In recruiting for diversity, boards should:
The benefits of board diversity are life-enhancing for an organization, Gigi concluded, and include increased participation, better board practices, less conformity and more opinions. A diverse board can also make better informed decisions, find it easier to meet funder requirements and develop an increased understanding of community needs. Learn more about building better boards
on the BoardSource website at: -- Consultant Ingrid Matuszewski attended the Business for Social Responsibility Conference in Miami, Florida from November 5 to November 8. The 2002 BSR Annual Conference focused on "Return on Responsibility: Realizing Value for Business and Society." ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** New Resources Added New links to articles, web sites, books and presentations, both produced by ERC and published by outside sources, are added regularly to the ERC's online resource database. Some of the references that were added last month but not previously cited in this newsletter are:
The ERC welcomes submissions of links
to other ethics-related articles, books and links. Suggest a reference
at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** 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 for general support:
We invite you to join our loyal contributors
in lending your support. To find out how to contribute or to donate
online, go to: Reminder to Federal Employees: The fall Combined Federal Campaign drive ends December 15th. If you have not already done so, please consider making a contribution to the ERC (CFC# 2456). Contributions are earmarked for ERC's character education programs, including MAXIMize the Moment, which assists schools in their efforts to bring character education to thousands of young people nationally and internationally by creating an environment in which values such as honesty, integrity, respect and responsibility are discussed, exemplified and nurtured. A donation of only $99 will provide one school with these relevant and timely character education resources for an entire year. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 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.
Copyright (c) 2002 Ethics Resource
Center. All rights reserved. Please contact ethics@ethics.org for information about reproducing any of the information contained within this newsletter or on our web site. Back issues of Ethics Today are available online at: /today/et_archives.html The Ethics Resource Center, 1747 Pennsylvania
Ave., NW, Suite 400
|
About ERC •
Advisory Services
•
Research
• Character
Education •
Resources
• News
•
Publications
• Fellows
• Support
ERC • Contact
Us
Ethics Resource Center,
1747 Pennsylvania Ave., NW, Suite 400, Washington, DC 20006
Telephone 202-737-2258 Fax 202-737-2227 E-mail ethics@ethics.org