Peter Drucker wrote in 1973, “But there neither is a separate ethics of business, nor is one needed”. He also pointed out, “Men and women do not acquire exemption from ordinary rules of personal behaviour because of their work or job”. “The first responsibility of a professional was spelled out clearly 2500 years ago, by Hippocrates – above all, not knowingly to do harm (primum non nocere)” . The FRC’s UK Code of Corporate Governance is specific; the Board of Directors are collectively responsible for the running of the business through its policies and procedures. In its supplementary document on Internal Control (www.frc.org.uk/corporate/internalcontrol.cfm it is referred to as the Turnbull guidance) paragraph 19 in addition to policies and procedures continues with tasks, behaviours and other aspects of a company “taken together”, in other words there are no exemptions ‘to control’ in a system of ‘internal control’.  What is the behaviour of people fulfilling their work responsibilities? What is managements ‘responsibility’ for the work performed including themselves?  I find it strange that SOX Sect 406 requires disclosure as to whether the entity has a ‘code of ethics’ or not with reason, for its senior financial officer but no one else.  Could someone in CIMA Council or Executive explain why it is not, in pursuit of ‘corporate (organisational) integrity? At work ‘we’ become part of an organisation.  To add to the list of where the UK has ‘been silent’ on ‘anti-corruption’ there is, “Principle 10: Business should work against all forms of corruption, including extortion and bribery. Global Compact as initiated by Kofi Annan 2000”  Leadership is an ‘open characteristic’, not even reserved for those with titles and defined responsiblities but also for those that will speak out and question, why? Real leadership is when these people are listened too and not chastised for having spoken up.  Regards, Cliff Moggs.  PS. Sorry that there are no paragraphs...for me..the preview does not work.

Of course, you can take a horse to the water and you cannot make him drink.  Unfortunately, many of the scandals of recent years were perpetrated by the chiefs of the companies, themselves. 

The notorious late Robert Maxwell, head of the Mirror Group, who helped himself to Pension Funds, famously said, "It is not about how wealthy you are, it is about how much credit you can get."

This sums up the ethical dilemma nicely.  As we now all know, Maxwell's "investments" were propped up by loans to pay off loans, to pay off other loans taken out to pay off even more loans and disguised a massive black hole.

At least with an ethical code, people like Robert Maxwell, or Madoff, king of the Ponzi schemes that rocked Amercia. would need to formally explain in their annual statements why no independent stakeholder was auditing him, or draw attention to themselves; the last thing they would want to do!

The assumption can no longer hold that some people are not accountable to anyone.

 

I agree with Kagiso Mosotho. It's  character & personality which will make a person ethical or unethical. But the law can change the odds with stick and carrots. Almost all the professional accounting institutes have stricter compliance clauses where in the members are expected to follow the ethical route.

No amount of written code of conducts or mission statements can guarantee adherence to perceived organizational/industry ethics or unity of an organization.

 Direction and adherence needs to come from the top; this is not the case as recent events shows that failure mainly stems from the leaders of organizations. 

Major risk here is a culture of organization leaders getting away unpunished for abuse of power and trust and banks being bailed out by tax payers and still allowed to carry on with same inattentive bonus culture being passed on to future generations of leaders. 

“What is an organization?” A unit/entity that acknowledges that its role in the society it operates goes beyond profit making and accepts it’s impact on the lives of not just it’s stakeholders but on humanity - which encompass the environment within which it operates. The days of profit maxisation as the main goal of organizations are coming to an end. Profit should be defined as not just financial gains but also value adding to society.

 

Best Regards

Ilori