Survey Ranks Banking as Industry with Highest Ethical Standards

Article excerpt

Banking was rated as the industry having the highest ethical standards, followed by utilities, and drugs, pharmaceuticals and cosmetics, according to a Touche Ross survey "Ethics in American business.

"Although these three are among the most highly regulated industries, respondents say that legislation is the least effective way of encouraging ethical business behavior," said Ramez M. Hakim, managing partner of the Touche Ross Oklahoma practice.

"Rather, they point to the adoption of business codes of ethics as the most effective way. Indeed, almost half of the respondents feel that the main reason for high ethical standards in a profession is that profession's own standards and accreditation," Hakim said.

Touche Ross undertook the survey to learn the opinions of key U.S. leaders on current ethical issues in American business. The questionnaire was sent in September to 8,180 officers and top executives of corporations with $500 million or more in annual sales, deans of business schools and members of Congress. The survey results represent the responses of 1,082 returned completed questionnaires.

Ninety-four percent of the respondents, representing all occupational, professional and industry groups, think the business community is troubled by ethical problems today.

Ninety-five percent of corporate directors or officers, 99 percent of deans of business schools and 77 percent of the members of Congress responding to the survey agreed. Most respondents also believed that high ethical standards actually strengthen the competitive position of a business enterprise.

The most striking conclusion of the survey was the majority of respondents who believed that a business enterprise actually strengthens its competitive position by maintaining high ethical standards, Hakim said.

The survey found that those who tend to agree most with this view are the older respondents who are corporate directors and officers, deans, bankers, engineers and accountants. Only 41 members of Congress agreed and 14 percent of the respondents said a company with high ethical standards is a weaker competitor, while 23 percent say that the ethical standards of a company have no effect on its competitive position.

Respondents were almost evenly split when asked what has been the most destructive to American business ethics. Decay in cultural and social institutions was frequently mentioned, but increased concentration on short-term earnings was mentioned almost as often. …