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Ethics Today Online Published
by the Ethics Resource Center
**A
Word from the President: Looking Ahead to 2006 While the news headlines focus on courtroom
discussions about corporate malfeasance of the past, the close of
the first quarter of 2006 gives ERC indications of hope for the
future of organizational ethics. Enron CFO Andrew Fastow testified on
March 7 that he "thought he was being a hero for Enron" as he helped
create false deals to meet earnings targets, and skimmed millions
off the top for himself. Yet we know that nowhere has the outcry
about Enron-like behavior been louder than it has in Corporate America.
Well-meaning principle-based leaders have, in the wake of Enron,
made strides in tending to their own organizations. Now, as the
Enron situation is revisited in the courtroom, at the ERC we've
had unprecedented requests from organizations for help in learning
more about their organizational culture, and the impact of their
leadership on the ethics of the organization. Our research through
the 2005 National Business Ethics Survey (NBES) indicated that leaders
have a tremendous impact on their organizations, especially when
it comes to influencing outcomes, such as levels of misconduct,
and willingness of employees to report. What are the specific factors
of leadership that contribute to such outcomes? How have all these
measures by business influenced public trust? We anticipate that
our ongoing research will continue to provide some answers as to
the trends in these and other questions. The Washington Post described Enron
as "a fundamentally self-destructive institution, a house of cards
where human error and a culture of ambition, secrecy and greed made
collapse inevitable." How does an organization reach that point?
We have been encouraged by increased demand for findings about organizations
and structures from sound research. The ERC Fellows Program continues
to be responsive to that need in the industry by actively engaging
in and publishing the results of research on issues of concern to
those in the business ethics field. Recently, a Fellows working
group reviewed what best practices companies were using in the area
of ethics and compliance when their company was considering a new
acquisition. That work resulted in a Mergers & Acquisitions
Template that is available for download from the ERC website. The
group also continues their twice-yearly meetings to identify new
issues for inquiry, and to report out on research projects they've
completed. In this issue of Ethics Today we highlight one example
by including a presentation made at the January Fellows meeting
by Marshall Schminke, a new academic Fellow, on the importance of
organizational structure to perceptions of procedural justice in
ethics matters. Finally, as we witness scandals rising
in other sectors of government and education, we are starting to
hear the public talk about the next generation--how are we preparing
our next generation to learn from our mistakes? At ERC we have hope
for the future as evidenced by youth in our Student Fellows Program,
which held its executive meeting in January and recently announced
the winner of the second annual Student Leadership in Ethics Award.
The students involved in our student ethics office programs are
indeed bright new stars in the field of organizational ethics. Patricia J. Harned, Ph.D. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ **
ERC Fellows Meet to Discuss Evolving Business Ethics Issues The ERC Fellows gathered in Washington
DC from January 25-27 to consider several topics of current interest
to business ethics practitioners Paul Fiorelli, Xavier University,
facilitated a panel of corporate representatives on the topic of
"Board Training -- What Works and What Doesn't" and Joan McKown,
Securities and Exchange Commission discussed "Required Actions by
SEC for Effective Ethics and Compliance Programs". In addition,
new Academic Invited Fellow Marshall Schminke, from the University
of Central Florida, presented on the topic of "Organizational Structure,
Justice Perceptions and Ethics." The Fellows heard updates from several
of their active working groups, which cover these nine topics: Read more about each working group
at: The Fellows Program is made up of 69
representatives from 36 member companies, including 54 corporate
representatives, 10 academic invited Fellows, 2 non-profit representatives
and 3 government liaisons. Read more about the ERC Fellows Program
at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ **
Focus on Procedural Fairness According to Dr. Marshall Schminke,
"To understand ethics and justice, we need to understand how structure
influences them." Dr. Schminke is a professor of management
at the University of Central Florida, where he specializes in business
ethics and management. He has published a book on managerial ethics
and served as associate editor for the Academy of Management Journal.
Beyond these academic pursuits, he has served as an advisor to organizations
ranging from family businesses to Fortune 500 firms, the U.S. Strategic
Command, and a number of universities and professional organizations.
View the PowerPoint from Dr. Schminke's
presentation on "Organizational Structure, Justice Perceptions and
Ethics" at: To gain an understanding of the topic,
he also suggested reading the following of his previously published
articles: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ **
Fellows Present Pace Award to Aaron Feuerstein Aaron Feuerstein was the third-generation
Chairman, President and CEO of Malden Mills, a Massachusetts business
that produces Polartec. In 1995, when a fire ravaged much of his
textile factory, Feuerstein became the symbol of a socially responsible
business owner who rules by his conscience. Despite overwhelming
pressure to resume operations overseas, Feuerstein instead pledged
to rebuild the mill at home and pay his employees during the three-month
reconstruction. This decision ultimately led the company to file
bankruptcy under Chapter 11 in 2001. Through it all, Feuerstein
was steadfast in his commitment to the local worker and his homegrown
company. In his nomination of Mr. Feuerstein,
Fellow Paul Fiorelli, Xavier University, said, "Mr. Feuerstein embodies
the best of corporate leaders who are willing to risk their own
finances for the benefit of other stakeholders." Read the press release announcing his
selection at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ **
Students Plot Course for the Future On Friday, Feb. 3rd, ERC hosted six
students for the 2006 Executive Student Fellows Program Meeting.
Attending students represented Lake Braddock Secondary School, Washington-Lee
High School, and Annandale High School all from the Northern Virginia
area. This executive meeting includes only
the students who are a part of the executive leadership of their
school's Student Ethics Office(tm) (SEO), and also differs from
the summer's week-long Student Fellows Program meeting in that it
is short, intense, and focused. The students spent eight hours reviewing
their individual and office's performance since the summer program
and planning for the rest of the school year. To lighten the mood
and keep the atmosphere lively, this meeting was car-themed. The
students started the day by thinking creatively - what type of car
are they, and then what kind of automobile is their SEO? Once the
students had a vehicle, they created a road-map from the Four Quarter
Focus Plan they had created in July during the week-long summer
Student Fellows Program. Specifically, students examined how well
their SEO stuck to the road-map. They examined what roadblocks had
impeded their progress, what obstacles had slowed them down, and
what unattended needs forced them to turn back around. Students
then worked together to come up with new activities for the second
semester. The day focused on the individual plans
each SEO(tm) had created during the summer. They mostly worked in
their school groups, but the students also had opportunities to
interact with students from different schools. An entire session
was devoted to a group brainstorm, where students identified one
problem from each school and the whole group came up with solutions
or strategies to address the particular problem. At the end, the
program strengthened each school's Four Quarter Focus plan and reignited
the students' enthusiasm for attending the July program. Read more about ERC's Student Ethics
Office and Student Fellows Program at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ **
Lake Braddock Student Wins 2005 Student Leadership in Ethics Award "One of the toughest aspects of being
an Ethics Officer is having the courage to stand up and assert the
moral perspective," writes Lauren Lessard, Lake Braddock Secondary
School (Burke, Virginia), who was selected as this year's winner
of the Student Leadership in Ethics Award. The panelists who selected
her were impressed with the way Ms. Lessard conducts herself as
a leader in her school and community, leading by example, humbly
acknowledging her faults and learning from her mistakes. The award
will be presented to Ms. Lessard at her school on March 13. Ms Lessard and the other finalist,
Sher Afgan Tareen, Washington-Lee High School (Arlington, Virginia)
are juniors in their respective schools and have been active in
the Student Ethics Office(tm) (SEO) program for years. ERC sponsors
the Student Leadership in Ethics Award annually, with underwriting
support from TEOCO Corporation. Any student who is active in his
or her school's SEO may apply. Read more about the 2006 finalists
and the Student Leadership in Ethics Award at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ **
Celebration of Commitment to Ethics ERC's First Annual Celebration of Commitment
to Ethics was held on November 2, 2005 at the New York Stock Exchange.
More than 150 business leaders turned out to support ERC and to
help ERC thank Raymond V. Gilmartin, Special Advisor to the Executive
Committee at Merck & Co., Inc. and Robin Aram, retired Vice
President, Policy and Issues at Shell International. Both men are
former members of ERC's Board of Directors, with Mr. Gilmartin chairing
the Board from 1993 to 1995. ERC President Pat Harned said, "Our
theme for the evening was purposefully chosen - we know from our
research that the greatest impact on conduct in the workplace is
the result of a commitment to ethics across the entire culture."
In addition to Dr. Harned, the audience heard remarks from the Chairman
of ERC's Board of Directors, Stephen D. Potts; Mike Wilkinson, Vice
President, Policy and Issues at Shell International (accepting honors
on behalf of Robin Aram, who was unable to attend the event); Ira
A. Lipman, Chairman and President, Guardsmark, LLC; Richard T. Clark,
President and CEO, Merck & Co., Inc. and Mr. Gilmartin, who
delivered the evening's keynote speech. ERC thanks the following for their
gracious support of our First Annual Celebration of Commitment to
Ethics: Leadership Sponsors Corporate Sponsors Benefactor Sponsors Patrons ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ **
Top Ethics Related Stories of 2006 The results of an ERC staff poll on
the top ethics stories of 2005 are as follows: Also receiving more than one vote were
the increase and fluctuation in energy prices, Supreme Court nominations
and hearings for two new justices, the revealing of "Deep Throat's"
identity, science fraud related to stem cell research in Korea,
and the increase in charitable donations as a result of several
major worldwide disasters. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ The top ERC related stories, as voted
by ERC staff, were: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ **
Invited Fellows Research Updates This new section of Ethics Today
will feature research and publications in the field of ethics that
have been authored by ERC Academic Invited Fellows outside of their
work with the ERC Fellows Program. Since many of the documents will
only be available by ordering reprints from the publisher, we cannot
provide copies of the documents but will include abstracts and links
to reprint-ordering information when available. Developing, Communicating and Promoting
Corporate Ethics Statements: A Longitudinal Analysis ABSTRACT: This paper reports on the
findings of the third in a series of surveys of large U.S.-based
and multinational corporations on their ethics statements. Focusing
on four types - values statement, corporate credo, code of ethics
and Internet privacy policy - we find growth in the use of these
statements over the last decade. We discuss the external communication
of these statements, including the avenues that are now used for
promotion and their intended audiences. The paper concludes with
a number of research issues to be addressed. A reprint of this piece is available
for purchase at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ **
Book Review: Smart & Good High Schools Former ERC Character Development Manager
Katie Sutliff Lang, who was pivotal in creating ERC's MAXIMize the
Moment and Student Ethics Office programs for secondary school students,
recently reviewed "Smart & Good High Schools: Integrating excellence
and ethics for success in school, work, and beyond", by Lickona
and Davidson (2005), Cortland, NY: Center for the 4th and 5th Rs
(Respect & Responsibility)/Washington, D.C.: Character Education
Partnership. "In many ways, 'Smart & Good High
Schools' is much more than just a worthwhile read for secondary
school administrators and teachers," she says. "Its reach extends
beyond the confines of the school to include parents and community
members, who are also part of the (character) education process.
But it is also an important step for the character education movement
as a whole. This self-proclaimed "Report to the Nation" is a rallying
cry and a beacon of hope: we HAVE to focus on teaching character
to our young adults and there are promising practices that can help
us do that." Read the rest of this review and find
out how to get a copy of the report at: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ **
Publications & Media Coverage ERC and ERC Fellows recently published
two new publications, both of which are available for free download
as PDF documents. Mergers and Acquisitions Template
(ERC Fellows) In 2004 the ERC Fellows
Program undertook an effort to review what best practice companies
were doing in the area of ethics and compliance when their company
was considering a new acquisition. In creating this document, the
Fellows gathered existing best practices from both ERC and EOA selected
member companies. Read more information about and view
the template at: Selections from Ethics Today,
Volume III Each year, ERC publishes
a collection of 10-12 articles that were among those most viewed
by ET subscribers during the publication year. Volume III is now
available as a free PDF download. See the table of contents and get a
copy of this compilation at: (Please note: We request that you give
your name and email address to download these documents.) ~~~~~ -- Forget About Perks, GovExec.com,
March 8, 2006 According to this article, executive
branch officials are susceptible to severe breaches of conduct,
often by top-ranking career executives or their political bosses.
The author quoted ERC Chairman Stephen Potts, who said he had noticed
a sense of entitlement by the offending executives. Because they
work so hard, are paid so little and get almost no recognition,
he said, federal executives sometimes feel entitled to bend or break
the rules. "Partly it can result from hubris," Potts says. "People
begin to think it's their birthright. -- Calling the Ethics Cops: A growing
army of corporate monitors are helping companies police their dealings
and adjudicate ethical quandaries, Business Week Online, February
13, 2006 This article on the growth in number
and authority of ethics officers cites ERC's National Business Ethics
Survey 2005. -- SOX Compliance Is Worth the Effort.
E-commerce Times, January 30, 2006 The synopsis of this piece on the rewards
for meeting SOX compliance says compliance has helped to make ethics
training more common within the corporate environment, continuing,
"According to a 2005 survey by the Ethics Resource Center, 69 percent
of employees reported that ethics training in their organizations
was up, as compared to 14 percent who said so in the same survey
conducted in 2003." The synopsis and the full article were picked
up by a number of other news, business and security websites. -- Rewriting history under the dome,
Lowell Sun (MA) January 27 These two pieces about congressional
House staffers making at least 1,000 changes in the past six months
to Wikipedia entries on an array of topics include a quote from
ERC Chairman of the Board Stephen Potts stating that the sheer breadth
of changes emanating from the House reflects an abuse of public
time and equipment. -- Employees may justify it, but
stealing is stealing, North Jersey.com, Herald News, January 16,
2006 ERC President Pat Harned is quoted
in this article on the ethics and reality of taking office supplies
home from the office. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 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. ERC thanks the following for recent
contributions: Board campaign: General Support: We invite you to join our loyal contributors
in lending your support. To find out about how to support the
ERC, go to: 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) 2006 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: http://www.ethics.org/today/et_archives.html For questions about your subscription, please email ethicstodayonline@ethics.org The Ethics Resource Center, 1747 Pennsylvania
Ave., NW, Suite 400 ======================================================= |
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