Ethics Today Online
Published
by the Ethics Resource Center
January 21, 2004 Volume 2, Issue 5
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You are invited to a special
forum on "America's Crisis of Integrity."
See "Demos and ERC to Host Forum on Cheating"
below for more information and to register to attend this free event.
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** The Top Ten Ethics Stories of 2003
In this issue, we revisit the stories determined by an ERC staff vote to be the top ten ethics-related stories of 2003. In addition to including the usual articles on corporate wrongdoing and scandal, we were pleased to be able to include a number of positive events, including a United Nations treaty on anti-corruption and continuing legislative, regulatory and academic efforts to improve ethical environments in the workplace. This is, we hope, another confirmation of the findings of the 2003 National Business Ethics Survey that showed a clear improvement in the perceptions of US employees about the ethical environment in which they work.
Please note: The descriptions of the events below have been compiled from stories reported in major news publications and their websites. The purpose of this ranking is not to endorse or condemn the parties, nor to imply special knowledge of the events or attest to the veracity of the reports, but only to consolidate what has appeared in the press and to rate the stories according to their perceived newsworthiness.
And now, the list:
1. Rulemaking and Regulations Proceed under the Sarbanes-Oxley Act
In 2003, the SEC took a number of actions designed to flesh out the requirements of the Sarbanes-Oxley Act of 2002, which redefined the roles and responsibilities of corporations and those who serve them.
In a July 30 press release "Summary of SEC Actions and SEC Related Provisions Pursuant to the Sarbanes-Oxley Act of 2002," the SEC lists a number of steps it took pursuant to Sarbanes-Oxley to restore confidence in the accounting profession, enhance enforcement tools and improve disclosure and financial reporting, the performance of "gatekeepers" and the "tone at the top."
In 2003, the SEC adopted rules:
It also:
Read this press release containing
links to these actions at:
http://www.sec.gov/news/press/2003-89a.htm
Read the SEC's releases, rulemaking
and studies regarding Sarbanes-Oxley at:
http://www.sec.gov/spotlight/sarbanes-oxley.htm
ERC Principal Consultant Frank Navran and Edward L. Pittman, an
attorney with the firm of Thelen Reid & Priest, coauthored an
article on Sarbanes-Oxley in the July 2003 issue of Wall Street
Lawyer. "Corporate Ethics and Sarbanes-Oxley" gives an overview
of codes of ethics and discusses the issues to consider in implementing
the new ethics disclosure rules written pursuant to Section 406
of the Sarbanes-Oxley Act. The article includes a detailed discussion
of each of the five elements required by section 406.
Read this article at:
/resources/article_detail.cfm?ID=836
2. United Nations Convention
Against Corruption Signed by Almost 100 Countries
At the close of a three-day conference in Mexico in December, almost 100 countries had signed a new United Nations treaty to combat corruption worldwide, pledging to return assets obtained through bribery and embezzlement to the country of origin. Ratifying countries agree to criminalize corrupt practices, develop institutions to prevent corrupt practices, and prosecute offenders.
Article 12 specifically applies the convention to corruption in the private sector, stating that each signatory country will take measures to prevent corruption involving the private sector, enhance accounting and auditing standards in the private sector, and provide civil, administrative or criminal penalties where appropriate.
Read a PDF copy of the full treaty
at:
http://untreaty.un.org/English/notpubl/Corruption_E.pdf
Find background, highlights and fact
sheets on the UN's website at:
http://www.unodc.org/unodc/en/crime_convention_corruption.html
View webcasts and press conferences,
see the list of signatories and read press releases at:
http://www.un.org/webcast/merida
In a December 12 press release, the ERC applauded the signing of
the U.N. Convention Against Corruption. "Corruption is a legitimate
global economic concern," said ERC President Stuart Gilman "Collectively
countries can have a direct, substantial impact on the fight against
corruption. This Convention is among the first to deal with public
ethics as well as private ethical issues. If the Convention is effectively
implemented it will not only husband necessary resources for citizens,
but create a level playing field for doing business around the world."
Read the press release at:
/releases/nr_20031216_treaty.html
3. Panel On The Federal Sentencing Guidelines For Organizations
Issues Final Report and Recommendations
On October 7, the Ad Hoc Advisory Group on the Organizational Sentencing Guidelines delivered its final report to the United States Sentencing Commission, completing an 18-month process to review the effectiveness of the organizational guidelines and solicit suggestions for their improvement.
Included in the proposed amendments are changes that:
Read the rest of the press release
at:
http://www.ussc.gov/PRESS/rel100803b.htm
In its report, the Advisory Group recommends that the Sentencing Commission promulgate a stand-alone guideline defining an "effective program to prevent and detect violations of law."
The report, executive summary and an
appendix showing the proposed amendments are available at:
http://www.ussc.gov/corp/advgrprpt/advgrprpt.htm
4. Increased Focus on Teaching Ethics in Business Schools
In the wake of the corporate scandals of the past few years, business schools around the nation started reassessing how they teach ethics, often adding content and/or courses. The need to emphasize ethics was further confirmed by the results of the ERC's National Business Ethics Survey 2003, which showed that younger managers with low tenure are about twice as likely as other employees to feel pressure to compromise company ethics standards.
In an August press release, ERC Fellows Program Chairman Stephen Potts said, "Too many corporate leaders are failing to pay adequate attention to ethics training for young people in the American workforce. At the same time, many business schools are failing today to provide tomorrow's generation of corporate leaders with the ethics education vital for the health of American business."
Read the press release at:
/releases/nr_20030805_fellows.html
The press release followed a May 2003 statement by the ERC Fellows
Program expressing their strong view that ethics must be made an
essential part of the curriculum of schools of business. They called
on business schools to provide positive attention in standard business
courses, as well as special attention in separate courses in business
ethics. "Inasmuch as schools of business provide the education and
training grounds for business practices," they said, "it is crucial
that students are exposed at the core level not simply to finance,
accounting, management and marketing, but also to ethical reasoning
and methods for resolving the difficult problems in these disciplines."
Read the statement of Proposed Standards
and Business School Responsibilities at:
/resources/article_detail.cfm?ID=828
In June, the Association to Advance Collegiate Schools of Business
(AACSB) launched an Ethics Education Task Force (EETF) charged with
identifying potential enhancements for business education and accreditation
review of ethics education. The task force will deliver a resource
document that provides guidance on the design, delivery and evaluation
of business ethics education. ERC Fellows Chairman Stephen Potts
accepted an invitation to serve on the committee for a one-year
term.
Read more about the AACSB at:
http://www.aacsb.edu
A December 2003 article noted that a number of well-known business
schools, including Harvard, MIT and Dartmouth, had expanded their
ethics education programs.
Read "Harvard Business School Expands
Ethics Course for MBA Students," at:
http://www.boston.com/business/globe/articles/2003/12/30/
harvard_raises_its_hand_on_ethics/
The July 2003 issue of Ethics Today included a collection of articles
and resources regarding whether and how ethics should be studied
at the undergraduate and graduate levels ethics in business schools.
View the collection at:
/today/et_v1n110703.html
In the same issue, ERC President Stuart Gilman penned a president's
column on the obligation of colleges and universities to teach ethics.
Read that column at:
/sg_corner_2003_07.html
5. Ten Wall Street Firms Agree to $1.4 Billion Settlement of Conflicts
of Interest Probe
In April, securities regulators agreed to a $1.4 billion Wall Street settlement, ending almost two years of investigations into charges that analysts issued biased research to gain investment banking business. The investigation was based on internal e-mails in which the firms' financial analysts privately criticized stocks they were touting to the public.
As part of the settlement, firms will have to physically separate their research and investment banking departments. The settlement also required that an independent monitor be assigned to each firm to make sure the terms of settlement are met and that an $85 million investor education program be created at the expense of the brokerages. The settlement was approved in November 2003.
Citigroup Inc.'s Salomon Smith Barney unit, Credit Suisse Group's CSFB and Merrill Lynch & Co. settled charges of securities fraud, according to the SEC. Those three investment companies, along with Morgan Stanley, Goldman Sachs Group, Lehman Brothers Holdings, J.P. Morgan Chase, Bear Stearns, UBS Warburg, U.S. Bancorp Piper Jaffray, also settled lesser charges of violating market regulations.
Before the dust had settled on that investigation, the SEC started investigating the mutual fund industry, alleging mutual fund share sale abuse in the form of "revenue sharing" -- or mutual funds paying brokerages to tout the funds' shares.
Read more about the Wall Street investigations
and settlement at:
http://www.washingtonpost.com/wp-dyn/business/specials/wallstreetprobe/
6. Trial Begins for Tyco Executives Accused of Stealing $600 Million
The trial of Tyco's former Chairman and CEO Dennis Kozlowski and former CFO Mark Swartz on charges of grand larceny and enterprise corruption began in October. Prosecutors allege that Mr. Kozlowski and Mr. Swartz stole $600 million by taking unauthorized pay and bonuses, abusing company loan programs and lying about Tyco's financial condition.
The jury saw evidence of Mr. Kozlowski's extravagant spending including videos of a $2 million birthday party for his wife on the Italian island of Sardinia, half of which was allegedly paid by Tyco, and an opulent Fifth Avenue apartment that featured a $6,000 shower curtain in the maid's bathroom, a $15,000 antique umbrella stand, a $2,200 wastebasket and paintings including a Monet and a Renoir.
Defense lawyers for Mr. Kozlowski argued, "There's no proof that Mr. Kozlowski knew ahead of time what this party was going to be like." In addition, the defense attorneys maintained the apartment was entirely owned by Tyco and rarely used by their client.
For former CEO Kozlowski, this trial will be followed by a second one on tax evasion charges related to his $13.2 million collection of art masterpieces.
Read about the birthday party at:
http://moneycentral.msn.com/content/invest/extra/P64581.asp
Read about the former CEO's plush apartment
at:
http://moneycentral.msn.com/content/invest/extra/P67300.asp
Read more about the trial at:
http://abcnews.go.com/sections/Business/US/tyco_video_031125-1.html
7. US Olympic Committee Rocked by Ethics Investigation
A scandal that began with the December 2002 investigation of United States Olympic Committee (USOC) Chief Executive Lloyd Ward for a possible conflict of interest ultimately resulted in Senate hearings and the resignations of eight officers, including president Marty Mankamyer, COO Fred Wohlschlaeger, and Mr. Ward himself.
The resignation of USOC ethics compliance officer Patrick Rodgers in January raised questions about how Mr. Ward avoided punishment for attempting to help his brother's business venture involving the Pan American Games. His resignation was followed by that of five other members of the USOC and its ethics oversight committee.
Late in January, the US Senate Commerce Committee held a hearing, to which it summoned Ms. Mankamyer and Mr. Ward among others, to discuss the future of the organization. Ms. Mankamyer gave up her post in February and Mr. Wohlschlaeger and Mr. Ward resigned in March, capping three months of turmoil for the national Olympic organization.
In his February column, ERC President Stuart Gilman used the USOC's troubles to highlight the vulnerabilities of all organizations and to emphasize that organizations must do more than just establish rules and create structures. "There is no doubt," he said, "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."
Read more of Dr. Gilman's column on
the lessons learned from the Olympics controversy at:
/sg_corner_2003_02.html
In the interest of transparency, we noted that this issue hit 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. One of them,
ERC Fellows Chairman, and former member of the USOC ethics oversight
committee, Stephen Potts, discussed his experience in a speech on
the ethics of non-profit management presented at the Boys and Girls
Clubs National Conference.
Read the presentation at:
/resources/speech_detail.cfm?ID=821
8. NYSE Chairman Richard Grasso Resigns; NYSE Approves New Governance
Structure
New York Stock Exchange Chairman and CEO Richard Grasso resigned in September after the details of his $140 million pay package were made public. The amount of his compensation was disclosed following the release in June, and subsequent adoption by the board, of a report from the Special Committee on Governance of the NYSE calling for greater transparency and disclosure.
Read that report at:
http://www.nyse.com/pdfs/initial_report_of_special_cte_6-5-03.pdf
In November, members of the NYSE voted overwhelmingly in favor of
a proposal to reform the organization's governance. The proposal,
which called, among other things, for the election of all independent
directors and greater transparency, required amendments to the NYSE
constitution and represented a departure for the NYSE, which for
three decades had an equal number of member and nonmember directors.
The proposed new structure also features a board of executives that
will serve in an advisory role to the board of directors.
The Securities & Exchange Commission approved the changes in December. "The changes represent a significant step forward in meaningful reform of the NYSE's governance structure and the transparency of its governance processes," said SEC Chairman William H. Donaldson. "These reforms are designed to strengthen the independence of the NYSE board and key committees, and better insulate the Exchange's regulatory function from its market operations."
Read more about the governance changes and the steps the NYSE will take to ensure transparency at: http://www.nyse.com/pdfs/insidenyse.pdf
Browse the Exchange's website section
on the governance of the NYSE at:
http://www.nyse.com/about/p1020656067652.html?displayPage
=/about/1052915873419.html
9. Martha Stewart Indicted; ImClone Systems Founder Sam Waksal Imprisoned
for Insider Trading
In June 2003, Martha Stewart was charged with securities fraud and obstruction of justice related to her December 2001 sale of stock in biotech firm ImClone just before it nose-dived. Prosecutors said she obstructed justice by lying about the stock sale and that she committed securities fraud by lying to prop up the share price of her firm.
The following month, Stewart's friend, ImClone CEO Sam Waksal, began serving a seven-year prison sentence after pleading guilty to charges related to insider trading in ImClone stock.
10. (tie) Enron Indictments Continue to Add Up; Officers Plead Guilty
The investigation and collapse of Enron may have started a series of corporate investigations, but it is far from over. A few of the highlights from 2003 include:
ERC President Stuart Gilman says that there may be a silver lining
in the cloud of Enron's collapse. In an online presentation, he
notes that the findings of the ERC's 2003 National Business Ethics
Survey may indicate a positive "Enron Effect" including evidence
that:
His presentation, "The Enron Effect: Ethics in the Workplace," includes other NBES findings as well as information on the benefits of formal ethics programs and ethical leadership.
View the entire presentation (as a
PDF) at:
/pdfs/Ethics_Workplace_072203.pdf
Enron has been in the ethics spotlight long enough to have been
the focus of an article in the first issue of Ethics Today Online
in September 2002. Still relevant today, "Ten Things Your Company
Can Do to Avoid Being the Next Enron" suggests ways to help your
company avoid the fate of Enron and other companies whose ethics
are called into question.
Read this story at:
/10things.html
10. (tie) Boeing Dismisses Two Executives for Unethical Conduct;
CEO Resigns
Boeing's Chief Financial Officer Michael M. Sears and Vice President Darleen Druyun were fired for discussing employment while Ms. Druyun was still working as an Air Force procurement officer and negotiating an airplane leasing deal with Boeing, and before she had disqualified herself from acting on matters involving Boeing. In addition, an internal review found both attempted to conceal their misconduct. Federal law bars government acquisition officers and outside companies from discussing employment while the government official still has authority over contracts linked to the contractor. CEO Phil Condit announced his resignation a week later.
In July, two former Boeing workers were indicted on a charge of illegally obtaining 35,000 pages of Lockheed Martin Corp. documents that helped Boeing win a $1.5 billion government contract. Boeing was banned from bidding on military satellite launches, and the Pentagon has transferred contracts worth $1 billion to Lockheed.
Following the July indictments, Boeing launched an internal investigation of its ethics policies. Reports from two separate firms recommended that the company take steps to avoid conflicts of interest in employee hiring and contract bids and that it have an ethics officer that reports to the chief executive and to the board's audit committee. Both studies, which came out before the November terminations, said that Boeing's ethical lapses were likely isolated and did not indicate a failure of its corporate governance programs.
Read a detailed article about the events
leading up to the Sears / Druyun firings and the problems related
to the revolving door between the Pentagon and the defense industry
at:
http://www.ocnus.net/cgi-bin/exec/view.cgi?archive=37&num=9197
Other stories receiving votes were those related to: HealthSouth
and former chief executive Richard M. Scrushy; Parmalat; ERC's National
Business Ethics Survey (2003); back to-back Global Conferences on
Corruption in Seoul, Korea; more college coaching scandals; Police
Chief Moose's book on the sniper slayings; NY Times Reporter Jayson
Blair; US / Canada conflicts over the power grid failure; Canadian
Prime Minister Martin and conflicts of interest issues; and the
rise of sports-related character education programs, such as the
Cal Ripkin Sr. Foundation and the Harlem Globetrotters joint effort
with the US Department of Education.
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** Top Stories from the ERC in 2003
The year also provided a number of key events and stories from the Ethics Resource Center. These included:
-- National Business Ethics Survey (2003) Finds Substantial Improvements in Ethics
American workers are seeing significant improvements in ethical conduct and practices within their own organizations, according to a major survey released in May by the ERC.
Read the Press Release at:
/releases/nr_20030521_nbes.html
Learn more about the NBES at:
/nbes2003
-- ERC Launches Advertising Campaign Supporting Character Education
in Schools
The ERC launched a print advertising campaign, which highlights the need for increased support for character development in schools.
Read the Press Release and see the
ads at:
/releases/nr_20031118_ads.html
-- Dr. Patricia Harned Promoted to ERC Vice President
ERC President Dr. Stuart Gilman announced in December the appointment of Dr. Patricia Harned to the position of Vice President of the ERC. Dr. Harned, who assumed her new position on December 12, will oversee program development and staff as they work with organizations across educational, business, and international sectors.
Read the Press Release at:
/releases/nr_20031208_vp.html
-- Business Roundtable Distributes 2003 NBES to Nation's Business
Schools
The Business Roundtable sponsored the distribution of almost 900 copies of the 2003 NBES to business school academic leaders internationally. "Ethical standards and practices in the workplace are the pillars of successful employment and ultimately the benchmark for a strong business," said Franklin D. Raines, Chairman and CEO of Fannie Mae and Chairman of the Roundtable's Corporate Governance Task Force. "Schools of business provide the education and training ground for business practices, and it is crucial that all schools of business ensure that students can both understand the ethical values that underpin business and be able to apply those values to their day-to-day work," Raines added.
Read the Press Release at:
http://www.businessroundtable.org/newsroom/document.aspx?qs
=5606BF807822B0F1DD3429167F75A70478252
-- Office of Government Ethics of Puerto Rico Releases Survey on
Employee Ethics
The Office of Government Ethics of Puerto Rico released the results of a sweeping survey of its public servants, measuring the perception of ethics within the workplace and the need to uphold ethical standards in government service. The ERC conducted the survey, which included key findings and recommendations for improving the ethical environment.
Read the Press Release at:
/releases/nr_20031027_prsurvey.html
-- Creating a Workable Company Code of Ethics, Second Edition,
Published
The ERC published a new, updated version of a guide to create a company code of ethics. First published in 1990, Creating a Workable Company Code is a practical guide to help executives, managers and code development teams develop and implement a code of ethical business conduct or revise existing standards and policies.
Read the Press Release at:
/releases/nr_20030612_wcc.html
-- Ethics Center Launched in Turkey to Combat Corruption and Strengthen
Business and Government Integrity Standards
Turkiye Etik Degerler Merkezi (TEDMER), a new ethics center, was launched in Turkey by Turkish citizens, business leaders and non-governmental organizations at a time of mounting public concern about corruption in both the public and private sectors.
Read the Press Release at:
/releases/nr_20030122_turkey.html
Visit the TEDMER website at:
http://www.tedmer.org.tr/page.asp?pageID=1080
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** More Resources Regarding the Ethics Issues of 2003
-- Saying that 2003 will be remembered as a year in which "a raft of new financial fiascos surfaced, rather than the year that Wall Street finally cleaned up its act In December," Forbes provided a review of the year's scandals, including a timeline of the "lowlights."
See "The Year in Scandals" at:
http://www.forbes.com/2003/12/09/cx_aw_timeline.html
-- Those accused of corporate crime started showing up in courtrooms
in 2003, with more to come in 2004. This San Francisco Chronicle
article updates (as of December 24th) the trials of those accused
of corporate wrongdoing.
Read "Their Day in Court: Execs Accused
Of Corporate Crime To Face Trial" at:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/
2003/12/24/BUGAC3TDTG1.DTL&type=business
-- The Washington Post has collected articles about ongoing corporate
ethics investigations involving specific organizations such as Tyco,
WorldCom, Enron, and Wall Street, as well as more general information
about corporate ethics policies and regulations.
Browse the Washington Post's Special
Report on Corporate Ethics at:
http://www.washingtonpost.com/wp-dyn/business/specials/corporateethics
-- Knowledge@Wharton spoke to academics and executives to try to
understand "Why America has witnessed misbehavior of breathtaking
scope in the first few years of a new century."
Read "Why Smart People Do Unethical
Things: What's Behind Another Year of Corporate Scandals" at:
http://knowledge.wharton.upenn.edu/index.cfm?fa=viewArticle&id=911
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** Boards of Directors Must Commit to Business's New Moral Compass
"How can the leadership of Corporate America once again find its moral compass?" asks author and ERC Board member Frank Vogl in this original article. "How can it cast aside its greed and arrogance and corruption and ensure that sound ethical behavior is the first business management priority?"
The answer, he says, rests squarely with the Board of Directors. "For too long too many Boards have either been fast asleep or mere rubber stamps for dogmatic Chief Executive Officers. They ignored corporate ethics codes, granted outrageous compensation to top executives, agreed to vast personal loans to powerful chief executive officers, and slumbered in the midst of massive abuse."
In the remainder of this article, Mr. Vogl discusses two key structural reforms for improving the ethics of Boards and advocates the implementation of a six-point ethics framework.
Read the full article at:
/resources/article_detail.cfm?ID=842
Mr. Vogl also wrote a Letter to the Editor of Financial Times on
the topic of Board ethics, in response to an article on corporate
governance. Mr. Vogl says the author of that article "highlights
the critical issues but fails to make a distinction between US corporate
ethics practices on the factory floor and those in the boardroom.
The facts are that ethics in the American workplace are improving
significantly just as ethics at the helm of corporations are deteriorating."
Citing the findings of the 2003 NBES, Mr. Vogl agrees that the persistence
and skill of ethics officers have had a deciding impact on the strengthening
of US workplace ethics. However, he says, we need to change the
influence of corporate ethics officers and expand their roles so
they can start to have a meaningful influence on board and top executive
practices.
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** Demos and ERC to Host Special Forum on Cheating on February 18
Are we a nation of cheaters? Nearly every day brings new stories about cheating across America: Mutual funds trading after hours; a slugger using a corked bat; students downloading papers from the Internet. Are Americans more dishonest than they used to be? And, what can be done to change the ethical climate in Business, Education and Sports? Demos, a non-partisan public policy organization, and the Ethics Resource Center invite you to join in a conversation that examines the scope of America's crisis of integrity - and identifies new solutions for strengthening ethics at the individual and organizational level.
The program, including brief presentations followed by an audience Q & A, will be held on February 18th from 5:30 to 7:00 pm at the Kiplinger Building, 1729 H Street, NW Washington, DC.
Speakers include:
With welcome and additional remarks by:
RSVP for this free event by calling or emailing Allison at the ERC, 202-872-4760 or allison@ethics.org.
Visit the following links for more information about the sponsors and the participants:
Buy David Callahan's book "The Cheating
Culture" through Amazon at:
http://www.amazon.com/exec/obidos/ASIN/0151010188/ethicsresourcece
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** "Rising Above Sweatshops: Innovative Approaches to Global Labor Challenges"
The ERC is pleased to announce the publication by Greenwood Publishing Group of "Rising Above Sweatshops: Innovative Approaches to Global Labor Challenges," authored by Laura P. Hartman and based on research funded by the ERC Fellows program. Ms. Hartman is Associate Vice President and Professor of Business Ethics at DePaul University.
Greenwood publishing describes the book as follows:
"Workers have basic rights that should not be violated, notwithstanding the geographical locale of their work. But those rights often appear to conflict with the economic and commercial needs of both developing nations and multinational enterprises. Creative approaches are necessary if workers' rights are to coexist with commercial success, or even survival. This book introduces the current global labor milieu and showcases innovative solutions via original case studies (e.g., Nike, Levi Strauss), which demonstrate how multinational enterprises can respect worker rights while benefiting from the economic advantages of a global labor market."
"Part I provides an overview of global labor challenges from a broad variety of perspectives, including economics, public policy, philosophy, and strategic management. The facts and contention of the "new sweatshop" school of thought are analyzed, along with industrialization and utilization of labor in developing countries; the application of basic human rights to the circumstances of workers; the unique role of nongovernmental organizations in the debate over global labor practices; and the "Total Responsibility Management" approach to implementing improved labor practices.
"Part II analyzes case studies, based on original field research, of well-known global corporations. The examined programs provide examples of innovative responses by multinational firms, the International Labor Organization, and other NGOs to challenges regarding global labor practices. These cases can help other firms avoid the unhappy dilemma of either exploiting workers and enduring a public relations backlash, or terminating operations in various developing nations. The true solution lies in companies respecting worker rights, while benefiting from the economic advantages of a global labor market."
Read more about "Rising Above Sweatshops"
or order from the publisher at:
http://www.greenwood.com/books/BookDetail.asp?dept_id=1&sku=Q618
Order this book from Amazon.com at:
http://www.amazon.com/exec/obidos/ASIN/1567206182/
ethicsresourcece
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
** Call for Nominations for National Capital Business Ethics Awards
The Greater Washington and Northern Virginia Chapters of the Society of Financial Service Professionals are now accepting nominations for the 2004 Business Ethics Awards (BEA) program. The National Capital Awards, presented annually in partnership with George Mason University, recognize businesses outside the financial services industry, which exemplify a strong commitment to business excellence and to the highest standards of civic and social responsibility, integrity and ethical conduct.
Ethics Awards Program are judged in one of five categories:
A company may be nominated by a customer, client, employee, consultant, vendor or private citizen who is impressed with the company's ethics program and demonstration of its practices. Nominations for the 2004 local awards program must be submitted on a form available on the BEA website. Nominated companies receive a copy of the completed nomination form and an official entry form to submit for consideration in the local program.
An independent panel of judges drawn from business, academia, public service, media, consulting and the ethics community will evaluate the entries and select the finalists and award Recipients. ERC Fellows Chairman Stephen D. Potts is one of the five judges for the National Capital Business Ethics Awards programs.
Get a nomination form, read the judging
criteria and get more information about the National Capital Business
Ethics Awards at:
http://www.businessethicsawards.org/clients/businessethics/buea.nsf/home
Those interested in submitting nominations or in obtaining a paper application form may also wish to contact Lisa Greene directly at LGreene@fslbene.com or by telephone at 301-564-2966 x109 for assistance in completing the application process.
Local award recipients move up to a
national competition that culminates with the selection of three
winners of the American Business Ethics Award. For more information
about the national awards, visit the Society of Financial Service
Professionals website at:
http://www.financialpro.org
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-- Business Roundtable Institute for Corporate Ethics Brings Leading Business Schools Together with Active CEOs
The Business Roundtable announced the creation of The Business Roundtable Institute for Corporate Ethics, to be housed at the Darden Graduate School of Business Administration at the University of Virginia. The center will conduct research, create a business ethics curriculum, lead executive seminars on business ethics and develop best practices in the area of corporate and business ethics.
"This Institute is a bold investment that will bring together the best educators in the field of ethics, active business leaders and business school students to forge a new and lasting link between ethical behavior and business practices," said Franklin D. Raines, Co-Chairman of the Business Roundtable and Chairman and CEO of Fannie Mae. "By bringing together the teaching and practice of business ethics under one roof, the CEOs of the Business Roundtable are aiming to make a lasting contribution to business ethics and the way our companies are run."
Read the press release at:
http://www.businessroundtable.org/newsroom/Document.aspx?
qs=55F6BF807822B0F13D1459167F75A70478252
-- Globetrotters and U.S. Department of Education Unveil Character
Education Program
In December, the Harlem Globetrotters, who are scheduled to visit over 150 elementary schools during the next three months, announced an innovative school program geared toward character education.
"For over 75-years, school visits by our players have been an important facet of the Globetrotters role as Ambassadors of Goodwill," said team Owner and Chairman Mannie Jackson. "We developed a program that adds substance to our school visits that deals with character education. We hope to impress upon students the importance of cooperating, being honest, putting forth a good effort, being enthusiastic, and to be respectful and responsible whether they are in school, at home, or in their communities."
The Globetrotters designed the program with assistance from the U.S. Department of Education and state educators.
Read the rest of this press release
at:
http://www.harlemglobetrotters.com/news/index.php3?id=63&item=63
-- Rolling Up Their Sleeves: Superintendents and Principals Talk
About What's Needed to Fix Public Schools
In this publication, Public Agenda examines the attitudes of public school leaders about their jobs and the challenges they face. According to the report, 93 percent of superintendents and 88 percent of principals say their district has experienced "an enormous increase in responsibilities and mandates without getting the resources necessary to fulfill them." Often ambivalent about parts of the federal No Child Left Behind legislation, most still agree with the spirit of the law. The report says that almost nine in ten call No Child Left Behind an "unfunded mandate," and most say the law "will require many adjustments before it can work." The report also notes that superintendents from large school districts are much more likely to support the law's key components than their colleagues from smaller school systems.
The Ethics Resource Center assisted Congressional leaders in the creation of and advocacy for federal legislation in the No Child Left Behind Act, establishing funds for a national resource center and the implementation of research in character education.
Read the press release at:
http://www.publicagenda.org/press/press_release_detail.cfm?
report_title=Rolling%20Up%20Their%20Sleeves
Read more about the report and download
a copy at:
http://www.publicagenda.org/specials/rollingup/rollingup.htm
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** Publications and Media Coverage
-- "Ethics expert: Train Workers on Reporting Misconduct," January 19, Washington Business Journal
ERC President Stuart Gilman to the Washington Business Journal about instilling a sense of ethics in employees at all levels of a business. In this Q&A session, he answered the following questions:
Organizations should talk about ethics, act ethical, keep promises and be upfront about ethical obligations to customers, he said "It is critical that senior leadership sets high standards," according to Dr. Gilman. "If they do not, they undermine the ability of employees to both respect and understand what ethics is in their organization."
Read the whole story at:
http://washington.bizjournals.com/washington/stories/2004/01/19/focus3.html
-- Dr. Gilman is also quoted in a related story in the same issue
on the decision by Drexel University to adopt the best practices
delineated in Sarbanes-Oxley. "Because of educational institutions'
perceived high standards of integrity and their primary mission
in preparing young adults for professional careers," he says, "it
makes sense for them to adopt stringent financial reporting rules."
Read "In Accountability, University
to Practice What it Teaches" at:
http://washington.bizjournals.com/washington/stories/2004/01/19/focus4.html
-- "A New Corporate Career: Ethics Manager," Leaders Magazine
Necati Guler, Managing Director of ERC's partner center, Turkiye Etik Degerler Merkezi (TEDMER), was recently featured in Leaders Magazine, published by the Bosporus University Business Administration Faculty Department. The article was published in both Turkish and English to allow both Turkish citizens and foreign investors to learn about TEDMER. Mr. Guler outlined TEDMER's progress since it's inception, emphasizing that the Center was formed by Turkish leaders from corporations, associations and foundations who recognize the necessity of anti-corruption efforts for Turkey's integration into the global economy and accession to the European Union. He discussed TEDMER's Ethics Officer Certification Program and training for corporate Boards of Directors.
"Although most companies claim that they do have in place a mechanism that addresses such issues, it is not clear as to how the system really works in practice. We try to explain to them that should they adopt a more transparent and less secretive approach, not only would this reflect well on the company itself but would also enhance work performance among employees while leading to improved overall company performance," said Mr. Guler.
TEDMER is currently focusing on strategies for public, private and NGO sector collaboration to promote a national integrity agenda in Turkey.
Read more about TEDMER at:
http://www.tedmer.org.tr/page.asp?pageID=1082
-- "The Ultimate Guide to Ethical Decisions," December 8, Tacoma
(WA) Business Examiner
Events and trends in corporate America do not always reflect what we see on Main Street, says this author, but they do sometimes spur discussions, perhaps even unspoken contemplations, among business managers and owners. The author discusses recent events at Boeing and wonders why some of those discussions and contemplations did not arise. Coincidentally, he says, the high school class where he is a Junior Achievement volunteer has been talking about ethical behavior in preparation for entering the workplace. He considers the points made by the ERC's recent character education advertising campaign including:
And his favorite:
After citing the 2003 NBES findings that show American workers are seeing big improvements in ethical conduct and practices within their own organizations, he ends with a quote from ERC President Stuart Gilman, who said, "Effective business leaders cannot rely on ethics rhetoric alone. CEOs in particular must communicate their personal commitment to high ethical standards and consistently drive the message down to employees through their actions."
Read the full article at:
http://www.businessexaminer.com/bizexam.lasso?-database=businessexaminer.fp3&-layout=Article%20Entry&-response
=articledetail.html&-recid=38052&-token=searching&-search
-- The print ad campaign promoting character development in schools
was also mentioned on December 7 in a column on advertising and
marketing that appears every other week in the Washington Post.
The ads are posted on interior bus cards and in Metrorail stations
in the Washington, DC, metro area.
-- "Zero Tolerance for Corruption: IDB takes series of measures
to increase transparency," November 2003, IDBAmerica, the magazine
of the Inter-American Development Bank
The IDB views corruption -- in both the public and the private sectors -- as a critical threat to the development process, one that distorts economic realities and creates perverse incentives that impact all levels of society, writes IDB Executive Vice President Dennis E. Flannery. The article goes on to discuss the measures being taken by the Inter-American Development Bank to implement a zero-tolerance policy against fraud and corruption. One key element, he says, is updating the ethics code for IDB staff and management, with advice from the Ethics Resource Center and former Peruvian ombudsman Jorge Santistevant. A code of ethics has also been approved for the members of the Board of Executive Directors, which represents the IDB's 46 shareholding countries.
Read the rest of the measures being
taken by the IDB at:
http://www.iadb.org/idbamerica/index.cfm?thisid=2477
-- "Ethical Issues Aren't Just The Big Things," December 8, The
Indianapolis Star
Unethical doesn't have to mean a millions-of-dollars kind of scandal, according to this article that appeared online in dozens of Gannett-affiliated newspapers and publications as part of the CareerBuilder/Work&Life service. It can be as small as fudging an expense report by 20 bucks or taking home a pack of printer paper. In this article, author Dana Knight cites a finding from the 2003 NBES that younger employees, classified as those under 30 with fewer than three years on the job, are less likely to report ethical misconduct. He interviews the head of a college business department and the president of a professional services company, who agree that students and young employees need to receive guidance before entering the working world. "If their judgment is not clear and they're not making decisions in an ethical, moral approach, then we're greatly at risk," says the professional services company president.
Read the rest of this article at:
http://indystar.gannettonline.com/careerbuilder/
career_resources/newarticles/ethicsMP.html
-- "These Logos Don't Run," Christian Science Monitor, 12/15/2003
Corporations with foreign offices have long been forced to weigh the market opportunity against the risks to employees in times of war and instability. Now, according to this article, the issues are even more complex. Pressure exerted on Western corporations to become better global citizens and much more deeply involved with their host communities has also made high-profile Western firms less able to withdraw and more vulnerable.
"The decision to stay may be reflecting, 'Yes, we have a commitment to this community, we have a commitment to these people, and to walk away due to the trouble would be to abrogate that commitment,' " says ERC Senior Fellow Sandra Waddock, a professor of management at Boston College. "I'm sure they're also thinking long-term in terms of developing their business as the situation stabilizes."
The article notes that actions that have a positive and immediate effect on local populations can win local support, and even a degree of protection for U.S. firms. Done right, corporate incursions are "a source of new jobs and real wealth in a community," says Waddock, "as opposed to financial wealth that gets shipped back to the home country of whatever multinational."
Read the rest of this article at:
http://search.csmonitor.com/2003/1215/p17s02-wmgn.html
-- ERC President Stuart Gilman appeared on "The Job Seekers Forum"
aired live by WTBQ 1110AM Live Radio, on Monday, December 22. His
interview on the topic of business ethics was broadcast in New York,
Connecticut and New Jersey.
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-- News of Dr. Patricia Harned's promotion to ERC Vice President appeared in the Washington Post's "New at the Top" column on January 5, 2004. When asked to comment on her new work, she said:
"One of the reasons I came to this organization was their fundamental belief that, even though there are universal standards, the way you go about helping people understand values and a sense of ethics can vary based on the setting that you're in, the traditions you have and the language you use."
She explained, "The first thing we do is conduct a form of assessment to understand who we're working with. Next we help companies specifically develop codes of conduct, statements of ethics and a set of values to guide behavior. Then we develop training programs that make sense for their organization. We do a lot of research across companies as well."
"I came to the ERC with the purpose of helping the organization to develop in the character education field, " she continued. "We're devoted to teaching ethics in a wide variety of settings. I've learned a great deal about teaching not only young people but also employees of companies to be ethical and do the right thing. I've learned a lot about how people learn a sense of ethics, and how companies really influence their employees' sense of ethics."
Read the full story at:
http://www.washingtonpost.com/wp-dyn/articles/A54827-2004Jan4.html
-- Dr. Harned's promotion was also reported in the January 2004
issue of Executive Update, published monthly by the Greater Washington
Society of Association Executives (GWSAE).
-- The ERC has agreed to write a monthly column for The Government
Services Insider, a new monthly newsletter focusing on the activities
and best practices of the Federal government professional and technical
services industry. In an ethics feature called "Beyond Reproach,"
the ERC will provide analysis and action recommendations regarding
how to resolve a specific ethical question arising from actual business
circumstances, based on ideas solicited from readers. The columns
will be released to appear in Ethics Today one month after they
are first published in GSI.
The publishers are making the first
issue free for downloading at:
http://www.gsinsider.com/downloads/GSInsider_jan04.pdf
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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 thanks the following for their contributions of general support:
The ERC thanks the following for their contributions in support of the character education programs:
The ERC thanks the following for their support of the CEO Council and Summit on Ethics:
The ERC thanks Weyerhaeuser for the donation of paper for our 2003 annual report.
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
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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PLEASE NOTE: Ethics Today will be published 11 times this year, with the July and August issues combined into one. An index will be published at the end of August.
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2004 Ethics Resource Center. All rights reserved.
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