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Dec 09, 2003

To Work, Corporate Ethics Programs Must Be Pervasive And High Priority Within An Organization, DePaul Ethics Experts Says

Corporate ethics scandals are again in the headlines, this time affecting companies in the mutual fund, aviation and media industries. What can executives do to avoid getting their firms and themselves embroiled in such controversies?

Nationally known ethics scholar Patricia Werhane, the Wicklander Chair in Business Ethics and director of the Institute for Business & Professional Ethics at DePaul University in Chicago, believes business leaders must make sure they do not create corporate environments in which ethical misdeeds are accepted as the price of doing business.

“It would be easy to say that the people behind unethical behavior in business are just bad people, greedy people,” Werhane said. “I think that’s too simple. By and large they are ordinary people. They would never lie, steal or cheat their neighbors or people they go to church or synagogue with. But when they go into the business arena, they imagine it’s a game in which ethics does not matter. They separate ethics from business.”

Instead, executives must foster workplaces in which ethical conduct is a priority—right up there with making profits and increasing shareholder value, Werhane said. She noted that recent business studies and books, including “Built to Last: Successful Habits of Visionary Companies,” by James C. Collins and Jerry I. Porras, have shown that the best companies have value-oriented missions and ideologies that are firmly established throughout the firm.

“Business leaders need to be role models and set the right example,” Werhane advises “They need to promote an ethics ideology and mission that goes all the way through the company, so that everybody knows it, everybody remembers it and it’s enforced. They need to reward ethical behavior, even if it costs them money, and get rid of people who violate these agreements.”

“This doesn’t mean unethical things won’t happen, considering how large the workforces are in many companies,” she added. “But if CEOs make ethics a priority and pervasive, at least the organization will have mechanisms to address them.”