Today's leading companies are expected not only to create wealth and produce superior goods and services but also to conduct themselves as "moral actors" - as responsible agents that carry out their business within a moral framework.Lynn S. Paine, Value Shift: Why Companies Must Merge Social and Financial Imperatives to Achieve Superior Performance (McGraw-Hill 2004)
If we have learned anything from the long series of corporate scandals that have so eroded public faith in our markets, it’s that fraud is rarely a one man job. One individual did not build these troubled companies, and one individual did not bring them to their knees. The culprit? The absence of a strong culture of integrity.
Despite ample resources and established compliance programs, securities violations in organizations are often caused by a long chain of ethical mistakes; one breakdown in judgment cascades to another breakdown, and then another. It could be smoothing out revenue figures one financial quarter, and then creating non-existent clients to cover up the prior misconduct the next. In time, isolated and seemingly random unethical choices often snowball into front page scandals.
It seems glaringly obvious in retrospect. Good conduct is not driven by good policies and procedures. Roads are not safe because of the presence of stop signs, or because drivers know that they might get a ticket if they do not stop. Roads are safe because drivers agree that following the rules protects our collective interests.
Ultimately, successful companies have strong ethical cultures shaped by fundamental agreements. The agreement to operate ethically is the first and most important. In these organizations, integrity is the only standard and doing the right thing is not an extraordinary act—it is the bare minimum. Ethics is embedded into organizations’ DNA through a deep integration of what they say and what they do. To protect employees, clients, and investors, companies need to shift their focus from operating in a compliant culture to building an ethical one. By doing so, they will attract like-minded employees, instill a sense of stewardship and personal accountability in the workplace, and avoid the scandals that have destroyed so many well-known companies.
In this section of our website, to help responsible organizations and their employees establish a culture of integrity, we provide a wealth of resources including lists of key organizations, websites, thought leaders, events, and publications in the corporate ethics arena.