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If you would like to receive our monthly electronic newsletter, please subscribe by clicking here. To read articles
from previous versions of Ethics Today, please visit the
Ethics Today archives. Published
by the Ethics Resource Center
Please note: The Ethics Resource Center will be closed for the holidays from December 25 through January 2. We will re-open on January 3, 2005. ****************************************************************************
**************************************************************************** ** A Word from the Chairman of the Board As Chairman of the Ethics Resource Center Board, I am pleased to announce that Dr. Patricia J. Harned has been appointed ERC President. Combining broad experience in the areas of ethics, education, and research with six years managing a wide range of projects at the ERC, Dr. Harned is well-equipped to lead the next phase of our organization's development. You can read more about Dr. Harned's outstanding background later in this newsletter, in our press release and link to her biography, but I'd like to take a few lines to fill you in more personally. I have been involved with the ERC since 2001, first as Chairman of the Fellows Program and now as Chairman of the Board. During that time, I have seen the world of ethics grow and change, with corporations facing unprecedented ethics challenges under new legislation, and more and more people coming to realize the importance of character education and global ethics management. Much as the field has changed and developed, so has Pat Harned. In positions of increasing responsibility - from Director of Character Education to Director of Research, from Managing Director to Vice-President - she has shown her commitment to making the ERC the thought leader in organizational ethics. She has directed original research and managed the development of new programs based on knowledge learned in the field, and is driven by our goal to help organizations foster environments where individuals act ethically. The ERC Ethics Index (SM) is just one example of her forward-thinking. When it became clear that the revisions to the Federal Sentencing Guidelines would emphasize the need for ethics program evaluation and risk assessment, Dr. Harned spearheaded the development of a benchmarking product whereby organizations can periodically evaluate the effectiveness of their compliance and ethics programs. Based on our exclusive dataset from periodic National Business Ethics Surveys over the past decade, the ERC Ethics Index includes a range of survey instruments that collect organizational data and compare it to benchmark data reflecting the experience of other organizations and industries. Dr. Harned is dedicated to the Board's vision of making our findings accessible for the benefit of all organizations, supporting their efforts to build healthy and ethical environments. This issue of Ethics Today is a prime example, including information and original thinking on risk management, an issue of current concern to many businesses, as well as the third article in a series detailing the revisions to the Federal Sentencing Guidelines and other ethics news. I have been fortunate to work with Dr. Harned during much of her tenure at the ERC and, along with the entire Board, am delighted to know that she will be leading the organization into a new and exciting era of organizational ethics. The Honorable Stephen D. Potts, Chairman of the Board ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** Guest Column: Enterprise Risk Management and the COSO Framework "High profile business scandals, economic slowdown causing many business failures, world events - all have created an increased awareness of the importance of risk management, governance and control. They have emphasized the danger of not paying attention to risks and uncertainties. On September 29, 2004, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) released "Enterprise Risk Management - Integrated Framework" (the "Framework") to provide companies with a roadmap for identifying risks, avoiding pitfalls as well as taking advantage of opportunities to grow shareholder value." In the rest of this article, ERC Board Member Colleen Sayther-Cunningham, President and CEO of Financial Executives International (FEI), identifies the components of the COSO Enterprise Risk Management Framework and discusses the importance of having enterprise risk management. Read the rest of this column at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** Resources from COSO on Risk Management COSO is comprised of five major professional US associations who joined in 1985 to sponsor an initiative to study the factors that can lead to fraudulent financial reporting and develop recommendations for public companies and their independent auditors, for the SEC, and other regulators, and for educational institutions. In 2004, following several years of research, analysis and a public comment period, the group released the COSO Enterprise Risk Management Framework, which expanded upon their original "Internal Control Framework." Authored by PricewaterhouseCoopers on behalf of COSO, the Framework is designed to raise a consistent "risk and control consciousness" throughout an enterprise and to become a commonly accepted model for discussing and evaluating the organization's risk management processes, The Executive Summary for Enterprise Risk Management -- Integrated Framework defines enterprise risk management (ERM), discusses the objectives of ERM, and suggests uses of the report. Download the Executive Summary of the
Framework at: COSO and PricewaterhouseCoopers also answer frequently asked questions about COSO's Framework,, such as how the Framework relates to other documents, including Sarbanes-Oxley and the Internal Control Framework, why organizations should support the Framework and how its use might impact a variety of people in an organization. Read the frequently asked questions
at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** The Federal Sentencing Guidelines and Enterprise Risk Management Published in October 2004, the second article in our series on the revisions to the Federal Sentencing Guidelines discusses the new requirements of "risk assessment" and "program evaluation." Author Ken Johnson puts these requirements into the broader context of other current management initiatives, such as "enterprise risk management," "managing for results," and "outcomes-based program evaluation." These various initiatives suggest that, to be effective, a compliance and ethics program must manage identified risks and uncertainties through a carefully tailored program that is designed, implemented, enforced, and evaluated to achieve carefully chosen program outcomes. Read "Enterprise Risk Management" at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** ERC Appoints Pat Harned as President At its recent meeting the ERC's Board of Directors appointed Patricia J. Harned, Ph.D., to the position of President of the Ethics Resource Center (ERC) and underscored the crucial central research mission of the ERC. Dr. Harned joined the ERC in 1999 and was appointed Vice President of the ERC in 2003. She succeeds Dr. Stuart Gilman, who retired as the ERC's President earlier this year. In accepting the position, she stated, "I am delighted to be leading the ERC at this time and fully share the Board's priority to enhance the ERC's national leadership in advising corporations and advancing research in corporate ethics. At the same time, we see great potential for our character education programs and for strengthening our network of international ethics institutes." Read the press release at: Read Dr. Harned's biography at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** 2004 Student Leadership in Ethics Award To acknowledge outstanding leadership and service by students participating in the ERC's Student Ethics Office™ program, the ERC, through the generous underwriting support of the TEOCO Corporation, has established a Student Leadership in Ethics Award. The award, which includes recognition and a $1000 grant, will be conferred annually on a student who demonstrates exceptional character and ethics in the school environment, as well as his or her daily life. Award criteria include a demonstrated commitment to ethics and the ability to translate vision into specific goals and behaviors, including:
The winner must also show evidence of ethical moral courage in dealing with issues internal and external to the Student Ethics Office and the school, and in setting and achieving high standards of ethical conduct within the school, including:
The 2005 Student Leadership in Ethics Award will be presented in late January during the Student Fellows Program Executive Meeting. We will publish summaries of the nominations for our outstanding finalists in the next issue of Ethics Today, ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** Revisions to the Federal Sentencing Guidelines: Seven Minimum Requirements (Part 3 of 7) This series, by Kenneth Johnson, ERC Adjunct Senior Consultant and Director of the Ethics & Policy Integration Centre (EPIC), describes and comments upon the US Sentencing Commission's amended requirements for an "effective program to prevent and detect violations of law." In his third article in the series, Mr. Johnson provides background information and discusses in some detail the seven "minimum requirements" of an effective compliance and ethics program, as the Commission defines one. For each requirement, he includes the actual language of the 2004 Organizational Guidelines, followed by the comments made by the Commission in the document forwarding the proposed amendments to Congress. He then comments on what our research and experience suggest might be helpful in either understanding or applying the 2004 Organizational Guidelines. Read this article at: Read the first article introducing
this series at: Read part 2 in this series "Enterprise
Risk Management" (also referenced above): ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Everyday Ethics: Taking the High Ground in Sports George W. Gowan, General Counsel at the United States Tennis Association, responded to a letter written for Tennis Week by ERC Board Chairman Stephen Potts regarding the Paul Hamm affair, with the following comments: "Years ago, Cornell had an Athletic Director Bob Kane, who later became President of the USOC. Cornell won a hard fought football game in the last minutes of play. After the game, it became apparent that the winning score had occurred on a fifth down. Kane got the team together and it was decided to give the win to the opponent. More recently, a team from Colorado found itself in an identical situation but kept the "win." While it may be understandable for Hamm to conclude "I did nothing wrong and I won," perhaps a Bob Kane might have acted differently than did the USOC." Look for more articles on having the courage to take personal responsibility in our March 2004 issue. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** Publications and Media Coverage -- "Right Makes Might," Tennis Week, October 26 In this letter, ERC Board Chairman Stephen D. Potts writes that the controversy over Paul Hamm's gold medal and questionable calls in the Serena Williams-Jennifer Capriati match reminded him of an example of sportsmanship he experienced when he played tennis at the highest levels of competition. He goes on to tell the story of how in the finals of a national tennis tournament, what appeared to be his match-winning shot was called out, to the surprise of his opponent Hal Burrows as well as himself. When the linesman held fast, Steve Potts nervously served off-speed -- and Burrows let the ball bounce by him without swinging. Mr. Potts, who described the incident as "one of the best things that ever happened to me" in a May 2003 Ethics Today article, also relates the story on video in his "Leaders on Ethics" interview. Mr. Potts formerly served on the USOC Ethics Committee and is currently chair of the USTA's Olympic Tennis Committee. He discussed the Paul Hamm controversy in an August 2004 Ethics Today article. Read "Ethics and the Game of Tennis"
at: View "Prince Hal of the Tennis Kingdom"
at: Read "Paul Hamm's Once in a Lifetime
Opportunity" by Steve Potts at: -- "There are lies, darn lies and business lies," Orlando Sentinel, December 12 "Are the rules different in business? I should hope not," said ERC Fellow and Penn State professor Linda Trevino in this article by an Orlando columnist discussing truth and lying in business. ERC consultants were also interviewed for the column expressing discouragement about the prevalence of fibbing in business matters. Read the column at: -- "Top job may cost Leavitt his business: Share in a family company could bring tough questions during confirmation," Salt Lake Tribune, December 16 Board Chairman Stephen Potts, former head of the Office of Government Ethics (OGE), is quoted extensively in an article discussing the options for former Utah Governor Mike Leavitt, who has been nominated for Secretary of Health and Human Services. Mr. Leavitt owns a one-seventh share of a large family-held insurance brokerage, and faces potential conflicts of interest if he is put in a position to influence federal health policies. Mr. Potts said it is possible Mr. Leavitt would be required to sell off his share of the business, which might prove difficult because they are privately held family interests. Another option cited by Mr. Potts is to put the shares in a trust in which an independent executor has full discretion over the assets, but he noted that Mr. Leavitt would then be prohibited from acting on anything that could impact the interest of the family insurance company. Finally, Mr. Leavitt could seek a waiver from the OGE on the basis that his decisions at the agency are so broad that the company would not receive a substantial benefit. The second part of the article shares opinions of representatives from health care organizations as to whether there is a real or apparent conflict. Read this article at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ -- Since the late 1990s, the ERC facilitated the development of the Ethics Institute of South Africa (EthicSA), the Gulf Centre for Excellence in Ethics (now the financially independent Dubai Ethics Resource Center), the private sector division of Transparencia por Colombia and the Turkish Ethical Values Foundation (TEDMER). While the centers in Colombia, South Africa and Turkey provide a wide variety of services in business ethics, education, corporate governance, fraud prevention and anti-corruption, each has more work to do in order to become self-sustaining. With a generous grant from The Merck Company Foundation, the ERC has engaged the London-based Prince of Wales International Business Leaders' Forum (IBLF) to help review each center's efforts to promote ethical business practices and good governance. The ERC and IBLF will visit each of the three centers and work with local staff to assess market needs and receptivity to ethics-related services, forge new relationships with prospective donors and discuss strategies for sustainability. Associate Consultant in International Programs Abby Davidson kicked off the first of these visits in December with a trip to EthicSA in Pretoria, South Africa. -- After leaving the ERC in September, former ERC Principal Consultant Frank Navran has re-established his management consulting and training company, Navran Associates 2, and will continue to work with the ERC and the international centers on special projects. Of particular interest is a new series, authored by Mr Navran and posted on his website, called "Simple Truths - Wisdom in a Complex World." According to Mr. Navran , "Simple Truths does not deny or underestimate the complexity of today's world. Neither does it express a yearning for a simpler time - viewed through a haze of nostalgia. It is neither simplistic nor simple-minded. Rather it seeks to remind us all that success in today's world does not require that we neglect the simple truths that have served us well in the past. Quite the contrary, it is precisely these simple truths that often provide the keys to unlocking the new and complex." The first two articles -- "KISS" and
"The Worst Case" -- are available now at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ** Support Organizational Ethics Research (and get NBES 2005) The National Business Ethics Survey (NBES) (SM) has proven to be of great value to organizations, as it identifies the issues and challenges facing our nation's employees that must be addressed in order to create and sustain an effective ethics program. The 2005 version of the study will undertake additional analysis of compliance practices, communications efforts by corporations, and industry-specific measures. We are in need of sponsors to enable us to expand the survey to allow for increased representation of prominent industries. Sponsors of this effort will help create a widely used and highly respected resource that business leaders, educators, and researchers can use to advance ethics and integrity in theiworkplace, schools and society. Donors of a tax-deductible contribution of $50 or more will receive a complimentary copy of our 2005 NBES and acknowledgment as a sponsor in the publication. Make a contribution to the 2005 NBES
at: For more information or to inquire about larger sponsorship levels, contact Development Manager Allison Pendell-Jones at allison@ethics.org. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 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 also thanks the following for contributions in support of specific programs:
We acknowledge with appreciation contributions to the NBES Customer Campaign from the following:
You can make a tax-deductible credit
card donation online at: To find out about other ways to contribute, 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. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ PLEASE NOTE: Ethics Today will be published 10 times this year. The November and December issues will be combined into one issue, as will the July and August issues. ======================================================= Copyright (c) 2004 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
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