A majority of top corporate ethics officers predict at least a half dozen more major business ethics scandals will break during the next 12 months, and some of these executives expect more than 20 such cases, The Conference Board reports. The definition of a “major” crisis includes anything causing more than $200 million in lost shareholder value.
The report is based on a survey of nearly 100 senior ethics executives attending the Board’s annual business ethics conference. Its release coincided with the news that the Board is creating a “Blue-Ribbon Commission on Public Trust and Private Enterprise to examine ethical and governance challenges facing corporate America and issue a series of best-practices guidelines.
A majority of the corporate ethics officers questioned said that more ethics training wouldn’t have prevented the collapse of Enron. About 54 percent of those surveyed say that even if Enron’s senior management had received extensive ethics training, it would have made little or no difference in preventing what happened.
“These findings show that an absence of ethical leadership and a culture of ‘anything goes as long as it makes a buck’ will prevail over even the best training, code of conduct or hotline,” said Steve Priest of Ethical Leadership Group, which conducted the survey. “This emphasizes the critical importance of building integrity into the essence of the corporation.”
Other survey findings:

        Nearly 60 percent said their own board of directors is not engaged enough in ethics/compliance issues.

        When asked what happens to great performers who don’t live up to their organization’s ethics values, 23 percent said, “We tolerate them,” while nearly 30 percent responded, “We coach them.” Just 18 percent said, “We fire them.” And eight percent said, “We promote them.”

        Nearly 60 percent believe their ethics/compliance program reduces the likelihood “quite a bit,” or “a lot” that a major ethics scandal will take place at their company.

        Fifty-seven percent said they have never engaged their board of directors in ethics/compliance training; 22 percent said they engage their board of directors in such training once every few years; 17 percent said once a year.

        More than 60 percent said they engage their senior management in ethics/compliance training once a year or every few years, but 23 percent say they have never engaged their senior management in ethics/compliance training.

      More than 80 percent said they had a helpline/hotline to report concerns about ethics issues. But 56 percent said they never survey their employees to assess the effectiveness of their programs.