Ethics
Today Online
Volume
1, Issue 6, February 2003
This newsletter
is published by the Ethics Resource Center.
Visit us online at .
- The President's
Words: Living the Olympic Values
- Seven Steps
for Changing the Ethical Culture of an Organization
- ERC Fellows
Discuss Scandals, Legislation, Measuring Ethical Effectiveness
- About the
ERC Fellows Program
- ERC Fellows
Research Reports and Publications
- Integrating
Ethics and Compliance Programs
- Setting
the Stage for Modeling Ethical Behavior
- Baldrige
Award Criteria Include Greater Emphasis on Leadership Ethics
- Ask the
Expert: How Can Your Organization Earn a Good Reputation?
- Opinion
Poll: The Most Important Leadership Qualities
- ERC Advises
Companies to Reach Beyond SEC Requirements
- Searching
for Maxims
- Book Review:
Sidgwick's Utility and Whitehead's Virtue
- Turkish
Ethical Values Center and Survey
- Publications
and Media Coverage
- News from
the ERC
- Offering
Our Thanks
**
Living the Olympic Values
The 1956 Melbourne Olympics are among
my earliest memories of televised events. I still find thrilling
the idea of the top athletes in each country, after dedicating much
of their lives to practicing, competing to be the best in the world.
For that one short period, we cheer on our own countries but also
stand in awe of individual achievements regardless of nationality
-- from Olga Korbut to Sonja Henie; from Roger Bannister to the
1980 US Olympic hockey team.
That is why the current public spectacle
surrounding the United States Olympic Committee (USOC) is especially
disturbing. An organization designed to ensure the development and
support of amateur athletics, whose mission is to "preserve and
promote the Olympic ideal as an effective, positive role model that
inspires all Americans," has become enmeshed in a bitter melodrama.
What should be a celebration of achievement has turned into a farce
of apparent confusion about the meaning of ethics, characterized
by hidden agendas and recriminations.
It is too easy in this scenario to
point out villains and identify heroes.* Instead I prefer to use
the troubles at the USOC to focus on the vulnerabilities of organizations
and, with the same lens, to emphasize that organizations must do
more than just establish rules and create structures.
To be truly effective, ethics must
be an integrated part of the organizational culture rather than
an appendage grafted on to the administrative systems. Ethics officers
cannot be mere window dressing, but must be seen as fundamental
to the organization and prized for contributing to its values and
atmosphere. Their positions and their perspectives must be heard
and respected, especially in tough situations that call for organizational
self-scrutiny.
From the top down, leaders in the organization
must respect and model the ethics process, even when it seems like
"swimming upstream". Those who perceive ethics programs as merely
a way to ambush them or their pet projects are confusing the ends
and the means. When made a part of the organizational culture, good
ethics programs will help prevent problems before they occur and
resolve issues when they arise. As painful as top management may
find a report or inquiry, they cannot demand or allow allegations
to be swept away through sanitized reports or misleading verbal
briefings, even when done under the notion of "damage control."
Concealment or obfuscation simply makes it worse. Following the
prescribed ethics process, however, generally results in greater
respect adhering to the organization, both from within and externally,
for living the values they espouse.
Clearly ethics structures, even good
ones, are not enough. An active understanding and integration of
ethical values must accompany them because these values drive the
health of good ethics systems. There is no doubt that the USOC created
their ethics committee and appointed an ethics officer with good
intentions. What we learn from the current situation, however, is
that they never made a serious effort to integrate a fundamental
set of values throughout their administrative structure. As more
information surfaces one thing becomes clear: There was a chasm
of misunderstanding about values between the ethics committee and
the executive committee of the USOC.
The result is a dysfunctional organization
that has endangered its mission. There has been one Congressional
hearing with more likely to follow, and there is a criminal investigation
to determine if the events constituted a violation of the Foreign
Corrupt Practices Act. No matter the outcome, it will take a decade
for the USOC to recover its reputation. Much like the recent ethics
disasters in corporations, the Executive Committee failed to keep
faith with its stakeholders. The failing can be seen as a structural
one, but I believe it is due in large part to a failure to take
responsibility for upholding a strong set of values in the committee.
Sadly, those who will be punished the
most are the amateur athletes who look to the USOC for support.
These men and women are dedicated to the values set forth in the
Olympic Charter, which states, in part, "Olympism is a philosophy
of life, exalting and combining in a balanced whole the qualities
of body, will and mind. Blending sport with culture and education,
Olympism seeks to create a way of life based on the joy found in
effort, the educational value of good example and respect for universal
fundamental ethical principles." They should be able to rely on
the same commitment from the USOC.
Stuart C. Gilman, ERC President
* In the interest of transparency,
we note that this issue hits close to home for The Ethics Resource
Center. Several individuals associated with our organization were
either part of the investigation or members of the USOC ethics committee
and subsequently resigned.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
**
Seven Steps For Changing The Ethical Culture Of An Organization
How can an organization, especially
one facing ethical concerns such as those at the USOC, change its
culture to one that promotes and rewards ethical behavior? ERC Principal
Consultant Frank Navran identifies the following seven steps to
organizational change:
1. State your position, philosophy
or belief
2. Create formal organizational systems
3. Communicate expectations through
informal (leadership) systems
4. Reinforce the policy through measurements
and rewards
5. Implement communications and education
strategies
6. Use response to critical events
to underscore commitment
7. Avoid the perception of hidden agendas
Read more about these seven steps at:
/resources/article_detail.cfm?ID=785
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
**
ERC Fellows Discuss Scandals, Legislation, Measuring Ethical Effectiveness
The Ethics Resource Center (ERC) Fellows
Program is a select group of corporate, government, non-profit and
educational leaders who share an expertise and strong practical
interest in the fields of organizational ethics. The program provides
an intimate forum for meaningful dialogue around cutting-edge ethics
issues, which then prompts the formation of collaborative working
groups and research teams to address ethics issues and challenges
facing organizations today. An emphasis is placed on work products
or research outputs with practical applications for corporate member
organizations.
At their recent January 15-17 meeting,
the Fellows participated in discussions of these four timely issues:
-- Initiatives of The Business Roundtable
John Castellani, President of the Business
Roundtable, an association of CEOs from leading US corporations,
discussed the effects of the corporate scandals of 2002 and how
to recover the lost confidence of the public. In the wake of Enron
and regular media reports of abuse and scandal, corporations must
combat the negative perceptions by making real changes in business.
Mr. Castellani remarked that while Sarbanes-Oxley is a good effort
at new corporate legislation, more is needed to repair the health
of corporate America. Trust needs to be rebuilt and re-established.
Mr. Castellani offered some ideas, including training of corporate
leaders, increasing transparency at the highest levels, and improving
the audit process. Furthermore, he noted that good governance enhances
and supports the innovation and creativity in the marketplace because
the companies that can be trusted are the ones that individuals
would want to invest in.
-- New Corporate Legislation
ERC Fellow Jo Pease, Shell Oil Company,
led this discussion with Dean Shahinian and Lynsey Graham, Counsel
for the US Senate Committee on Banking, Housing and Urban Affairs,
on new corporate legislation affecting ethics officers, in particular
the Sarbanes-Oxley Act of 2002. The Fellows agreed that while the
new Sarbanes-Oxley Act is commendable, there is an opportunity now
to refine the language, examine the requirements imposed on corporations
as a result of these new laws and make any necessary additional
changes to deter future wrongdoing and expand the scope of this
important legislation.
-- New Perspectives
Mary Broad, Principal Consultant with
Performance Excellence and Toni Hodges, a measurement and evaluation
consultant, addressed metrics of ethics program effectiveness with
ethics training as the focus. The two outside experts discussed
evaluating training programs, transfer of knowledge from training
to practice, and return on investment, noting that it has been difficult
to measure tangible results and benefits of ethics training programs.
Following a discussion of various assessment methods, the Fellows
decided to make this the topic of an impact study and to consider
researching other industries to see what information is available
that might apply and be transferable to ethics training programs.
-- Foreign Corrupt Practices Act
and Facilitation Payments
Frank Vogl, President of Vogl Communications
and a member of the ERC Board of Directors, along with Thomas Patton,
partner at Tighe Patton Armstrong Teasdale, PLLC, led a panel discussion
on the ethical debate around facilitation payments. Alexandra Wrage,
General Counsel Northrup Grumman and President of TRACE (Transparent
Agents and Contracting Entities) also participated in the discussion.
In general, the FCPA prohibits corrupt
payments to foreign officials for the purpose of obtaining or keeping
business. However, the Act contains an explicit exception for "
facilitating or expediting payments" for "routine governmental action"
and these are an area of concern for American companies.
"Many multinational firms see the use
of facilitating payments abroad as legal because it is allowed under
the FCPA and the OECD Convention" notes Mr. Vogl. "The acceptance
of the system of facilitating payments creates a disturbing ethical
polarization. On the one hand we have the leading industrial nations
of the West and on the other we have all other countries. It is
legal under the FCPA for U.S. firms to use facilitating payments
in Canada and in the U.K., France, Germany and Australia, but U.S.
executives will note that they do not routinely make such payments
in these countries because it is not culturally acceptable there
[…] Western firms do routinely make 'facilitating payments' in countries
that they consider to be 'less developed' such as Brazil, Bangladesh,
China, South Korea and South Africa."
Mr. Vogl noted that in an increasingly
globalized world, the ways in which corporate executives act overseas
impacts corporate reputation. Because of that, many companies are
working to minimize or eliminate facilitation payments entirely.
For instance, Shell states in its business principles that companies
"should outline their approach to facilitation payments in their
business standards guidelines which offer guidance on gifts, entertainment,
hospitality, conflicts of interest, use of intermediaries and other
potentially 'grey' areas involving third parties."
Although international corporate management
and corporate lawyers often determine issues related to these kinds
of payments, Mr. Vogl raised the question of whether ethics officers
should also have a seat at the table when corporate policy on facilitating
payments is discussed.
Read Frank Vogl's notes from his presentation
on facilitation payments at:
/resources/article_detail.cfm?ID=786
Read the Foreign Corrupt Practices
Act at:
http://www.usdoj.gov/criminal/fraud/fcpa/fcpa.html
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
**
About the Fellows Program
The purpose of the ERC Fellows Program
is to identify, examine and further understand the critical organizational
ethics questions challenging organizations today. Its mission is
to:
Identify, clarify, research and critically
evaluate organizational ethics and compliance trends, issues and
ideas.
- Foster ongoing collaboration and
cooperation among business, government, non-profit, educational
and organizational ethics communities.
- Strengthen our ability to anticipate
and meet emerging workplace ethics and compliance challenges.
- Lead our institutions and society
to a positive organizational ethics and compliance agenda for
the future.
- There are currently 55 members of
the ERC Fellows, representing the nation's most prestigious corporations,
government organizations, non-profit organizations and academic
institutions.
Get more information on the ERC Fellows
Program at:
/fellows/aboutefp.html
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
**
ERC Fellows Research Reports and Publications
As part of its mission, the ERC Fellows
Programs has funded studies and publishes these timely reports:
--Insights 2000: A Report of the
ERC Fellows offers key insights, challenges, implications and
recommendations from the program's first three projects: Ethics
as a Leadership Issue, Ethics and Compliance in a Global Economy,
and the Integration of Principle into Practice.
Read more about this document and get
a PDF copy at:
/fellows/publications.html#insights
--In Managing Ethics Upwards,
the Ethics Resource Center Fellows identify the trends that have
characterized the role of the ethics officer, the leadership styles
of executives, and their relationship with each other in the realization
of an ethical workplace. In addition, the shifting role of upper-management
is explored within the context of a global economy and overall "global
integrity".
Read more about this document and
get a PDF copy at:
/fellows/publications.html#up
--Ethics and Compliance in a Global
Economy: Making the Case reflects a desire on the part of the
Fellows to contribute to the goal of building an "ethical world."
In this regard, many leaders in U.S. businesses and not-for-profit
organizations, as reflected in the Fellows group, see this publication
as assisting in the quest to define the most appropriate and most
effective means of promoting the highest standards of business ethics
worldwide.
Read more about this document and get
a PDF copy at:
/fellows/publications.html#global
--Moral
Person, Moral Manager discusses what it means to be an ethical
leader? Is it enough to apply sound ethical practices in your decision-making
process without sharing your thoughts with others? How important
is one's reputation for ethical leadership and what effect does
it have on a company's employees? Linda Trevino's article, Moral
Person/Moral Manager, was also published in the California Management
Review (CMR) and was one of three final contestants for CMR's Accenture
Award. One judge noted that the article was "strategically important
for the improvement of business" and that "it should be required
reading.
Order a reprint of Moral Person and
Moral Manager from:
http://www.haas.berkeley.edu/News/cmr/order.html
The index listing is: Treviño,
Linda Klebe, Laura Pincus Hartman, and Michael Brown, "Moral Person
and Moral Manager: How Executives Develop a Reputation for Ethical
Leadership," 42/4 (Summer 2000): 128-142.
--Integrating Ethics and Compliance
Programs: Next Steps for Successful Implementation and Change,
based on interviews with over twenty-five ethics officers at leading
organizations, identifies common challenges in implementing ethics
and compliance programs and suggests ways for organizations to address
them. In particular, it focuses on how to better integrate ethics
codes, training, help lines and other program elements into everyday
business activities. An article based on this study was also published
in the Fall 2002 issue of Business and Society Review (see below)
Read more about this document and get
a PDF copy at:
/fellows/publications.html#integrating
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
**
Integrating Ethics and Compliance Programs: A Study of Ethics Officers
in Leading Organizations
Broadly defined, integration is the
ability to put ethical principles into practice. Yet ethics officers
often know more about developing programs than about integrating
them with their organizations' formal systems and informal practices.
This study, and the two related articles, is based on the insights
of ethics officers in leading organizations who have wrestled with
these concerns.
"Ethics is a journey, not a destination,"
notes author and ERC Research Manager Joshua Joseph. It is critically
important to know who you are and what you are trying to achieve
within your unique organizational culture before setting a values-based
ethics program in place. Thinking through these things in advance
can help avoid the pitfalls.
The study identifies a number of other
common threads and conclusions:
When trying to integrate ethics programs
into a culture, an organization's history can be quite important.
The study finds that the ethics policies of many companies began
as compliance programs and were broadened into values-based ethics
programs. But ethics and compliance differ in some key areas that
are not always recognized, including how they are justified and
what are the best practices. While one can simply support the development
and implementation of a compliance program by saying that "regulations
require it," values-based programs are usually instituted because
the leadership believes it is important to do more than comply with
the law. Thus, they are justified based on diverse needs and goals,
such as raising employee awareness of legal and ethical concerns,
reducing financial risks, protecting brand and reputation, building
employee trust and more.
Adding values-based ethics also raises
the stakes because companies essentially promise employees that
they will do more than the law requires. A company must manage expectations
and be careful not to promise more than can be delivered, for employees
and customers will quickly notice discrepancies between reality
and what was promised.
Additionally, Joseph notes that, in
some cases, best practices for compliance programs may actually
work against achieving values based ethics program goals - a problem
that many of the companies interviewed failed to see when they broadened
their ethics programs. It is therefore important to look carefully
at how compliance program practices may affect new goals for values-based
programs. Organizations should not assume that the two will necessarily
be compatible.
The study also discusses the importance
of thinking beforehand about how an ethics program should be structured
to best fit within the organizational culture.
Finally, effective communication is
key. For instance, regular input can be a valuable way to monitor
program effectiveness, but seeking input without acknowledging or
addressing it can harm program credibility.
Order a reprint of this article from:
Business and Society Review,
Journal of the Center for Business Ethics at Bentley College
http://www.blackwellpublishing.com/journal.asp?ref=0045-3609
Get a PDF copy of the original study
at:
/fellows/integrating.pdf
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
**
Setting the Stage for Modeling Ethical Behavior
A standard refrain heard often when
business conduct is discussed is that leaders need to model ethical
behavior for their employees. Modeling is a powerful leadership
strategy where you show your employees through your own behavior
how you want them to behave with others. It has been used successfully
to demonstrate flexibility, politeness, decisiveness, compassion,
sharing and numerous other desirable traits.
It also works extremely well as an
ethics-teaching tool. In fact, one of the principal findings of
the Ethics Resource Center's 2000 National Business Ethics Survey
was that the modeling of ethical behavior by organizational leaders,
managers, supervisors and co-workers sets a good example of desired
business behavior.
Read this article by ERC's Program
Development Manager Jerry Brown, which includes practical tips for
modeling ethical behavior, at:
/resources/article_detail.cfm?ID=784
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
**
Baldrige Award Criteria Include Greater Emphasis on Leadership Ethics
Responsibility for corporate stewardship
and ethical business practices starts at the top with an organization's
chief executive and governing body, says the 2003 Baldrige Award
performance excellence criteria released January 13 by the Commerce
Department's National Institute of Standards and Technology (NIST).
"Senior leaders should serve as role
models through their ethical behavior …," according to the 2003
criteria. In addition, it states, "Senior leaders should be responsible
to your organization's governance body for their actions and performance.
The governance body should be responsible ultimately to all your
stakeholders for the ethics, vision, actions, and performance of
your organization and its senior leaders."
Read the NIST's press release at:
http://www.nist.gov/public_affairs/releases/2003Criteria.htm
In addition to being the basis for
a Baldrige Award application, the Baldrige performance excellence
criteria are used by thousands of organizations to assess and improve
their performance on a wide range of key indicators.
The Baldrige Criteria for Performance
Excellence is available in editions for business, education and
health care at: http://www.quality.nist.gov/Business_Criteria.htm
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
**
Ask the Expert: How Can Your Organization Earn a Reputation for
Being Trustworthy?
Trust is one of those words that we
all use yet rarely define. ERC Principal Consultant Frank Navran
says trust is a result of certain specific actions and is tied to
the predictability of one's actions or behavior. In his answer,
he also includes minimum requirements and best practices for organizations
that want to first deserve and then earn trust.
Read Frank's answer at:
/ask_e5.html
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
**
Opinion Poll: Leadership Qualities
Which of the following do you consider
most important in a leader?
- Conducts personal as well as professional
life in an ethical manner
- Treats employees (or students, volunteers,
etc.) fairly and compassionately
- Talks openly with employees (or
students, volunteers, etc.) and respects their opinions
- Makes decisions based on "the right
thing to do" without regard for public opinion or financial considerations
Take our February poll at:
/cfpoll.cfm
Last Month's Poll: In January we asked
which criteria you use the most in your business decision-making.
58% answered "Idealistic considerations" (the right thing to do);
23% said "pragmatic considerations" (business consequences of an
action); 11% voted for altruistic considerations (impact will on
others?) and 8% answered "individualistic considerations" (what
will happen to me as a consequence)
See the results of last month's poll
at:
/cfpollresults.cfm?QuestionID=18
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
**
Ethics Resource Center Advises Companies to Reach Beyond SEC Requirements
With the recent release of the Security
Exchange Commission's rules requiring that all companies disclose
whether they have a Code of Ethics, the Ethics Resource Center (ERC)
is urging companies to go beyond the basic SEC requirements.
Under the new rules required by the
Sarbanes-Oxley Act of 2002, a public company must disclose whether
they have a Code of Ethics that applies to their principal executive
officer, principal financial officer, principal accounting officer,
controller or persons performing similar duties. In addition the
company must disclose amendments to or waivers of the code of ethics
relating to any of those officers.
"While the SEC stopped short of requiring
disclosure of whether a public company has a code that applies to
Corporate Directors in the exercise of their duties and responsibilities,
the ERC recommends that companies have broad-based codes that also
apply to directors," said Stuart Gilman, President of the Ethics
Resource Center.
Read the rest of this press release
at:
/releases/nr_20030206_sec.html
Read the SEC's press release detailing
its actions at:
http://www.sec.gov/news/press/2003-6.htm
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
**
Searching for Maxims
MAXIMize the Moment (MTM) is a subscription
character resource that combines current events and everyday issues
faced by young people with the time-honored wisdom of maxims --
concise statements that are used to instruct and guide behavior.
One can find inspirational quotes or even maxims almost anywhere,
but those used by the MTM program are special because they relate
to real life and offer ethical guidance in difficult situations.
ERC's character development department,
which runs MAXIMize the Moment programs for schools and families,
with funding from the John Templeton Foundation, is seeking your
help. Share the wisdom and the insights of those you admire with
students across the country and around the world. When you send
ideas and thoughts that have inspired and guided you, we can use
them in a number of ways, such as including your maxim in the MTM
database, using your maxim in one of our weekly lessons, or featuring
your maxim on our public website so even non-subscribers can learn
from it.
Here are a few sample maxims to inspire
your thoughts:
- It is better to light a single candle
than curse the darkness.
Motto of the Christopher Society (Service)
- You are only as good as your word.
Sir John M. Templeton (Trustworthiness)
- The time is always right to do what
is right.
Martin Luther King, Jr. (Courage)
Submit maxims to ERC's character development
program at:
/character/submit_maxim.html
Read more about MAXIMize the Moment
and MAXIMize Your Family Time at:
/maximize
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
**
Book Review: Sidgwick's Utility and Whitehead's Virtue: Metaphysics
and Morality
In Sidgwick's Utility and Whitehead's
Virtue; Metaphysics and Morality, Kevin Durand, Associate Professor
of Philosophy, Henderson State University, brings new focus to the
philosophical speculations of Henry Sidgwick and Alfred North Whitehead.
Whitehead and Sidgwick were two influential
19th and 20th Century thinkers who provided a large body of work
on ethical theory and application and yet are frequently overlooked
in examinations of ethical and quasi-ethical theories.
Read the rest of Jerry Brown's review
of this book at:
/resources/book_detail.cfm?ID=787
You can also order Sidgwick's Utility
and Whitehead's Virtue: Metaphysics and Morality from Amazon.com
by following the above link.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
**
Turkish Ethical Values Center and Survey
In January, the ERC partnered with
the Turkish Ethics Values Foundation (TEDMER) to establish a new
ethics center in Turkey at a time of mounting public concern about
corruption in both the public and private sectors.
"Our goal is to conduct research in
the area of ethics, offer support and services to institutions and
organizations, define corporate ethical codes, and create benchmarks
and standards," said Sabih Tansal, President of TEDMER. "Our mission
is to contribute to economic, cultural and social life in Turkey."
Read the rest of this press release
at:
/releases/nr_20030122_turkey.html
The TEDMER 2003 Ethics Summit held
in Istanbul in January included a presentation on the results of
Turkey's National Business Ethics Survey conducted by Strateji GFK,
a research and planning firm based in Turkey. This survey, modeled
on the ERC's National Business Ethics Survey, interviewed a cross
section of Turkish citizens to better understand how they see ethics
in their workplace and in their society.
Get a PDF version of Turkey's National
Business Ethics Survey at:
/resources/article_detail.cfm?ID=783
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
**
Publications and Media Coverage
-- On January 22, ERC Principal Consultant
Frank Navran was quoted on a Marketplace broadcast that focused
on the new requirements and the ramifications of the Sarbanes-Oxley
Act. Frank commented that, even when companies are not required
to do so by legislation, market forces alone are pushing companies
to pay for compliance services. "It makes it easier to attract and
retain quality people," he stated, "and it makes it easier to be
in the marketplace if people trust you."
Listen to the entire broadcast at:
http://marketplace.org/shows/2003/01/22_mpp.html
-- The following letter from Frank
Vogl, member of the ERC Board of Directors, was published in Financial
Times on January 23.
"Sir, Your report on the world's most
respected companies (January 20) is to be commended for including
questions on corporate integrity in its survey for the first time.
The most ethical companies are those whose managements consistently
do the right thing in accord with corporate standards, even if this
sometimes means losing business.
The experience at the not-for-profit
Ethics Resource Center suggests that the most ethical corporations
tend to be those where top management reviews the corporate ethics
code; where executive performance relative to the code is regularly
assessed; where company-wide training programmes stress ethical
good practices that reach well beyond the requirements of legal
compliance; and where the chief ethics officer has direct access
to both the chief executive officer and the board of directors.
Sadly, very few of the companies at
the top of your list of those "that demonstrate the most integrity"
meet these requirements. Some are under investigation by regulatory
authorities. Some have been prominent in the press for alleged unethical
practices. Most do not include chief ethics officers in their senior
management teams or involve their boards in corporate ethics reviews.
Let us hope that next year's list more accurately applauds the considerable
number of corporations that are, in fact, first-class ethical leaders.
Frank Vogl,
President, Vogl Communications
Director, Ethics Resource Center
Washington, DC, US
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
**
News from the ERC
-- On January 23, Principal Consultant
Frank Navran spoke on the topic of "Ethical Considerations for Political
Programs" in a presentation to National Political Action Committee
Conference for Corporations and Associations.
Recent scandals reveal an undercurrent
of distrust of the relationship between government and special interests,
caused in part by the appearance of corporate misdeeds which are
tolerated because politics is obligated to its corporate donors
and in part due to the feeling that government's agenda is unduly
influenced by corporate interests. Like all organizations, PACs
need to be both trustworthy and trusted, and Frank offered examples
and guidelines for how to accomplish that.
Political programs must consider two
separate ethical questions - what does it take to deserve the public's
trust and what does it take to earn that trust. In the context of
political action committees, PACs are deemed legitimate so long
as their actions meet society's standards and "fairness" seems to
be dominant, that is, the represented groups do not accrue undue
influence.
Frank's discussion outlined minimum
requirements as well as best practices. He also noted that an organization
can earn trust if society understands and believes that:
- Its agenda is "within bounds"
- It is playing by the rules
- It is telling the truth
- It consistently does what it says
it will do
- There are no hidden agendas or
deeds
Read more on the issue of trustworthiness
in this month's "Ask the Experts" column at:
/ask_e5.html
-- On January 15, International Programs
Consultant Cherie Raven spoke to a group from Eurasia about the
ERC and its programs. The group included professors and lecturers
from National University of Uzbekistan, Novosibirsk State University
(Russia), State Maritime Academy (Russia) and DS Lomonosov Moscow
State University.
-- At the invitation of the United
Nations Office on Drugs and Crime (UNODC) 15 international organizations
involved in curbing corruption, including the Ethics Resource Center,
met for the 3rd Interagency Anti-corruption Coordination Meeting
in Vienna on January 23-24
The participants discussed and agreed
upon a framework for future work and draft terms of reference were
recommended for review and approval by the membership. These included:
- The International Group for Anti-Corruption
Coordination is dedicated to strengthening international anti-corruption
coordination and collaboration in order to avoid undue duplication
and to ensure effective and efficient use of existing resources,
using systems already in place at the regional and national level.
- It provides a platform for exchange
of views, information, experiences, and best practices on anti-corruption
activities for the purpose of enhancing the impact of these activities,
including support for the UN Convention against Corruption.
Other participants included four United
Nations Agencies and Departments, Organisation for Economic Cooperation
and Development (OECD), the European Anti-Fraud Office (OLAF), the
European Commission (EC), Council of Europe (CoE), Commonwealth
Secretariat, European Bank for Reconstruction and Development (EBRD),
Inter-American Development Bank (IDB), the World Customs Organisation
(WCO), and Transparency International (TI)
-- All organizations participating
in the Interagency Anti-corruption Coordination Meeting made brief
presentations about their anti-corruption programs and the challenges
they faced. ERC President Stuart Gilman discussed the ERC's work
fostering regional ethics centers and initiatives in the UAE, South
Africa, Colombia, St. Petersburg, Turkey, Korea and Romania, which
were developed with the following objectives:
- Establish independent, non-governmental
organizations
- Foster broad, society-wide support
- Offer consulting, education and
advocacy
- Link centers with academia, private
sector and other NGOs in the region
- Network centers with global colleagues
Stuart remarked on the ERC's experience
working with corporations, including 2/3 of the Fortune 100, more
than 70 governments, educational institutions, associations, multi-laterals
and NGOs, including the World Bank. In discussing the scope of the
ERC's work, he referred to the mission of ERC's International Programs,
which is to build organizational ethics and good governance capacity
in developing countries as a means of advancing their respective
agendas of economic and social development.
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Offering Our Thanks
As a non-profit 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 sends special thanks to the
many individuals who designated the Ethics Resource Center as the
recipient of their gifts through the Combined Federal Campaign of
2002. These contributions will provide MAXIMize the Moment scholarships
for 36-weeks of ethics education to 50 schools.
We invite you to join our loyal contributors
in lending your support. To find out how to contribute or to donate
online, go to:
/support_how.html
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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
Washington, DC 20006 Telephone: 202-737-2258