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Speaker relays steps for ethics

Nov. 5, 2004

By ELIZABETH BISHOP, reporter

In the second plenary session of the Business Ethics Forum, "Emerging Trendsin Corporate Ethics," Dr. Edward S. Petry spoke to business students and professors on methods of ensuring that organizations meet ethical standards.

Petry recently resigned as executive director of the Ethics Officer Association (EOA), a nonprofit organization for ethics managers that promotes compliance of ethical standards and business conduct programs.

Petry opened the session by describing the field of business ethics as it was a decade ago. He recalled three main goals ethics officers of the time would keep in mind. The first was for wider acceptance of the ideas of business ethics, the second was a community of scholars and solution providers working together in the field and the third was an accepted management system for companies to use.

"The term 'business ethics' used to be a joke," Petry said. "It was assumed that the two should not and could not mix."

He went on to describe how the field of business ethics has evolved.

He said the first major breakthrough in the field came in the late 1990s, when the New York Stock Exchange employed a list of requirements for companies, listing ethical practices among the new standards.

One year later, the U.S. Justice Department began addressing the need for ethics in business.

"Because of these occurrences, it is now accepted that business and ethics must mix," Petry said.

Petry said the occurrence of unethical practices in corporations can be attributed not only to the individual guilty of unethical behavior but to the entire organization.

"The organization may have turned a blind eye or maybe even encouraged them," he said.

Petry said some organizations have a culture that promotes illegal activity by putting too much emphasis on profits or ignoring ethical considerations.

He said that was the problem behind all the recent corporate scandals, like at Enron.

"All the corporations [involved in the scandals] had an ethical compliance program, but it didn't work because of a bad culture," he said.

Petry said the best method for ensuring ethical compliance is for organizations to implement an internal program to monitor and enforce actions.

The EOA held deliberations to produce a model for organizations to follow when constructing internal ethical compliance programs. The model, which was passed as a requirement for all organizations Monday, has seven steps.

Petry said having an internal ethics compliance program will not only discourage future illegal activity, but it will also protect organizations from large fines if an employee does break the law. But "if a company doesn't comply with the government, fines can go up 400 percent," he said.

The session closed with a question and answer session, in which Petry explained to students how to find a job with a company that complies with ethical standards and how to deal with ethical issues when they arise.