Category: Ethics-International

A UK trade weekly for lawyers, Legal Week, has a wonderful article encouraging businesses to base their policies not merely on compliance with ethics laws such as Sarbanes-Oxley and its non-US equivalents, but on creating a culture of ethics that far exceeds the legal minimum.

When we focus on compliance alone, we are setting the bar too low. Adherence to the regulations becomes an acceptable standard to work to and we make it difficult for employees to deal with issues not covered by the rules. Something more holistic is increasingly required.

If we move the focus towards ethics and the need to change behaviour, we are inevitably required to humanise the subject matter and begin to introduce a context to the content. Properly built and implemented ethics education becomes about being part of a better business, about improvement and moving towards something.

Oddly enough, the author, Chris Campbell, cites a tobacco company as a positive example. To my mind, there’s nothing ethical at all about selling tobacco–but certainly the principle holds.

He proposes three questions to evaluate any action:

. are my actions potentially open to misinterpretation?

. are my actions likely to negatively impact others? and

. what will I be required to do as a result of my actions?

Just after Enron’s Skilling and Lay are found guilty, a paper in Alberta, Canada, accuses the company of using Alberta as a testing ground for the shenanigans that created havoc in California’s energy market.

It’s been shown that Enron grossly inflated power prices in our province. Apparently this ploy was given the code name, Project Stanley, derived from the name of our top hockey trophy.
Although a probe into Enron by Canada’s Competition Bureau in 2000 found no fault with the corporation, new evidence has reportedly surfaced, showing that there was bragging within its walls about how it had artificially driven up electricity costs in Alberta.

Meanwhile, The Economist reports,

A court in Seoul sentenced Kim Woo-choong, the former boss of Daewoo Group, to ten years in prison and ordered him to forfeit 21 trillion won ($22 billion) for his part in South Korea’s biggest corporate scandal. Mr Kim, who founded the chaebol in 1967, was found guilty of fraud and embezzlement. Daewoo collapsed in 1999 with debts of $80 billion.

Daewoo was once the most prominent of Korea’s industrial giants.

Meanwhile, a Hong Kong newspaper offers a general challenge to the long-held culture of family controlled business in Hong Kong and China:

Overdone patronage begets corruption, begets poor business culture, economic waste, social dysfunction. Getting rid of the patronage system has clear benefits for all and managerialism can in some cases undermine the worst aspects of the family-run model. But, like all coins, this one can be flipped. On the other side are the lessons learnt from the US shareholder model which provide specific warnings.

But the paper warns that the Enron verdict proves the corporate model favored in America…

can be just as arrogant and irresponsible as the most parochial family business. The bottom line is that the shareholder model as practiced in the United States is no bulwark to an elitist, irresponsible and corrupted cabal of managers ascending to a position of omnipotence and over-riding due process, ignoring the law, and marginalizing the standards of ethical business practice.

Meanwhile, an Australian blogger reports on a telecommunications stock so shaky after corporate scandals that shareholders tried to unload their stock on eBay!

As scandal after corporate scandal was revealed, all leading straight to the CEO’s large, but mostly unused desk, calls for his head were answered with his sacking. Used to years of bad results the shareholders – by now nearly 70% of all Australians – welcomed the news, but when he was awarded a $50 million payout, it was the final straw.

And one final meanwhile, here at home, wrangling continues over whether the FBI had the right to raid the office of a sitting Congressman accused in a bribery investigation. Frist says the FBI was justified; Hastert and DeLay say they overstepped. And just to show that the GOP doesn’t have a lock on ethical failure, the representative in question is William Jefferson, Democrat of Louisiana.

After six years of Bush appointees who either had no qualifications or who strongly backed various immoral and heartless positions, it’s nice to see an environmentalist and someone who seems to pay attention to ethics nominated for Secretary of the Treasury: Henry “Hank” Paulson. There’s a nice profile of him in the UK paper, The Telegraph–one of several I’ve read that all seem to agree–at least on casual glance, he appears to be a good guy.

Lord knows, we need a few of those!