I Am Joe’s Conscience

Employers are setting up ethics programs to teach workers to do the right thing. Is this the wrong approach?

When the Ethics Officer Association held its first meetings in Waltham, Massachusetts, in 1992, there were 19 members. A decade later, the group of corporate-ethics officers had grown to 600. Today, thanks to financial scandals and regulatory reform, says executive director Keith Darcy, the recently renamed Ethics & Compliance Officer Association boasts a roster of some 1,200 members, including executives from 62 companies listed in the Fortune 100.

This emphasis on integrity has also trickled down to midlevel managers, who are increasingly being asked to attend ethics courses. Typically, the programs involve training in ethical reasoning, along with mechanisms to encourage the reporting of misconduct. In some cases, employees act out scenarios that could land them in trouble in the workplace. Says Kirk O. Hanson, professor and executive director of the Markkula Center for Applied Ethics at Santa Clara [California] University: “You’re trying to help the broad middle strengthen its ethical backbone to resist going along with the evil few.”

A noble goal, to be sure. But is there any reason to believe all these codes and classes and scenarios do any good? The evidence is mixed. A recent survey of more than 4,000 employees found that reports of misdeeds have not diminished. In fact, nearly three-quarters of the employees involved in the survey, which was conducted by accounting firm KPMG, said they had observed misconduct in the prior year. That’s about the same level of wrongdoing reported in a pre-Sarbanes-Oxley survey.

Indeed, ethical training may not be enough to discourage cheating in a competitive business world. Training must be coupled with new techniques — things like preemployment screening and revamped performance reviews — if future Enrons and WorldComs are to be averted.

Whatever It Takes

The debate over the value of ethics training in the workplace is nothing new, of course. Upstanding moral behavior and unfettered capitalism don’t necessarily always go hand in hand. Certainly, when employees are judged primarily by their ability to meet sales goals — or maximize shareholder value — no one should be particularly shocked that some cut corners to make the grade.

Critics of ethics training point out that almost everyone is exposed to some kind of moral teaching from parents, teachers, or religious leaders well before they enter the corporate world. The implication is clear. If employees don’t know right from wrong by the time they enter the workforce, no ethics program on the planet will help fill the gap.

Santa Clara’s Hanson disagrees. He believes ethical training helps the average worker actually identify moral issues, think them through, and resist the pressure and temptation to stray.

The KPMG survey does suggest that the most rigorous corporate-ethics programs have some value. Survey subjects who indicated their employers have a comprehensive ethics program (about 11 percent of respondents) reported fewer instances of misconduct, felt less pressure to bend the rules, and were more comfortable about reporting misdeeds to their supervisors. Ethics programs, concludes Richard Girgenti, partner in charge of forensic services for KPMG (Americas), “can have a positive impact.”

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