Untangling the Confusion over Organizational Ethics

By Liautaud, Susan | Stanford Social Innovation Review, Summer 2013 | Go to article overview

Untangling the Confusion over Organizational Ethics


Liautaud, Susan, Stanford Social Innovation Review


A wave of ethics transgressions underlines the importance of comprehensive ethics oversight for organizational success, by susan liautaud

Last year, 2012, was in many regards a step forward for proponents of ethical action. Roger Gifford, the Lord Mayor of the City of London, one of the world's financial capitals, declared business ethics a priority and critical to the City's economic success. François Hollande published a Code of Ethics within 11 days of becoming president of France. And the new Chinese premier, Xi Jinping, highlighted the ongoing danger of corruption to economic and social development as a central part of his election discourse.

Despite this focus on ethics among world leaders, overall, failed ethics was the leitmotif of 2012. The media, particularly in the United Kingdom, were rocked by ethical failings. At the BBC there were allegations that now deceased on-air personality Jimmy Savile had sexually abused hundreds of childrea And at Rupert Murdoch's News Corp. there were charges that his now-defunct tabloid News of the World regularly hacked the phones of prominent people it was covering.

The business world saw numerous examples of ethical transgressions. Raj Rajaratnam, founder of Galleon Group, and Rajat K. Gupta, a former director of Procter & Gamble and former head of McKinsey & Co., were convicted of insider trading. And Barclays Bank, UBS, and Royal Bank of Scotland paid fines for their role in conspiring to manipulate LIBOR interest rates. Nonprofits haven't fared much better. The United States Navy Veterans Association is charged with scamming close to $100 million from thousands of US donors. Pennsylvania State University was engulfed in a widespread coverup of a now convicted pedophile.

What is clear from these examples is that ethics oversight is essential to success for all organizations, whether corporate, nonprofit, governmental, multi-lateral, or academic. Classic notions of governance, or the governance-accountability-transparency trio, are insufficient. Calls from world leaders are important but just the start. Regulation and self-regulatory efforts are essential, but they require ethics analysis in tandem. And last, although corporate social responsibility (CSR) has evolved into an important strategic tool, it too must operate within broader ethics oversight.

What does successful ethics have to do with governance, legal compliance, and CSR? The following framework suggests an approach to untangling the persistent confusion about this question.

First, let's take a step back and consider a real-world definition Of ethics. My working definition of ethics in my ethics consulting practice is "an ongoing determination of moral principles guiding conduct, taking into account all relevant information, values, and current and future impact on all stakeholders (including society at large)." Ethics first and foremost requires high-quality decision-making. Implementation of decisions and vigilant ongoing oversight of conduct must follow.

Now for the framework. Ethical rules do not dictate absolute right or wrong, but they are absolutely about determining right and wrong within the context in question. Ethics extends beyond governance, the law, and CSR but should be integrated into an organization's approach to all three.

Ethical standards do not guarantee perfection | Ethics does not seek or require perfection. For example, as acknowledged in the recently revised Resource Guide to the U.S. Foreign Corrupt Practices Act, neither the US Securities and Exchange Commission nor the US Department of Justice holds organizations or their leaders to a "standard of perfection." Even outstanding ethics oversight does not protect completely against intentional wrongdoing-a rogue trader, such as UBS's Kweku Adoboli, or minor accounting fraud. Nor does ethics guarantee good outcomes of all decisions. Ethics positions organizations and individuals to make decisions that, when we look back from a future point in time and irrespective of outcome, reflect good decision-making in accordance with the definition above. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Untangling the Confusion over Organizational Ethics
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.