Five years on, how has Enron shaped our views on corporate integrity?
With all the media attention on corporate ethics scandals, US employee opinions on corporate integrity have jumped 11 per cent, according to an ISR study.
The research, based on surveys of more than 200,000 employees, found that workforce awareness of corporate integrity, social responsibility and corporate ethics issues have all increased since 2001, the year Enron went belly-up.
ISR executive director Adam Zuckerman said: ''After the SEC began investigating Enron's accounting scandal in 2001, ISR documented an increased interest in better understanding the role ethics plays in a company's culture, from identifying potential landmines to determining how to make improvements before a crisis occurs."
Yeah right. So does that mean every executive and director has become more ethical? Not likely.
For sure, everyone is more aware of business ethics issues these days. But then, you would have had to be on mars for the last five years not to be.
The more important question is whether the purported Enron effect has seeped into the culture of companies. And the evidence is inconclusive.
Consider this. Separate studies show that in 2003, about 20 per cent of people surveyed believed you had to "bend the rules" or act unethically to get ahead, and would do it too if they thought would not get caught.
In 2004, that increased to about 33 per cent but in 2005, it dropped back to 22 per cent. But more than 40 per cent still said they would act unethically if directed from their boss, and would lie to their boss to cover a mistake.
These are some of the findings in a report, The Hidden Costs of Dishonesty, part of the Knowledge@W.P.Carey series.
As management professor Barbara Keats points out in this study, part of the problem is the short-termism and focus on quarterly earnings.
What's also needed is the kind of ethics education that fosters critical analysis and accepting that decision-making can be ambiguous. Not easy when schools and universities are producing people who have been fed answers, and only one absolutely right answer, to each problem.
And as I mentioned in a blog last week, there seems to be a definite gap in corporations between rhetoric and practice.
no comment untill now