U.S. business schools say there is renewed interest in courses on business ethics and corporate responsibility, in the aftermath of recent revelations of corporate fraud at Enron, Worldcom and other major American corporations.
It may be a bad time for the reputation of corporate America, but it's a good time to teach business ethics.
Ellwood Oakley, ethics professor at Georgia State University's Robinson College of Business said today's Wall Street Journal headlines offer ample material for tomorrow's lesson plans.
"I think the basic lesson is that if you don't play by the rules that our society has set out, that the game doesn't work. The rules on fair reporting of financial status have been on the books for years. The companies that have chosen to ignore those rules are the ones that have gotten caught," Mr. Oakley said.
The importance of vigilance and oversight is another lesson emerging from today's scandals, said Jim Fisher, the director of St. Louis University's Emerson Center for Business Ethics. Safeguards are in place, he said, and those who are supposed to enforce them must take their responsibilities seriously.
"Corporate boards have a fundamental role to watch out for the interests of the shareholder and keep some kind of rein on management. Security analysts and brokerage houses also have a responsibility in offering good advice to investors. Accounting, certainly they should be there as well, making sure auditors to their part," Mr. Fisher said.
The recent scandals have also created a new lesson, said Mr. Fisher, and that is the power of shareholder revenge. The New York stock market's plunge, he said, was investors' way of telling corporate executives wrongdoing has its consequences.
"I think if there is a silver lining in this dark cloud, it is that the market place is responding strongly to discipline the companies. I think the concern and reticence of investors is a strong, countervailing influence and, in the final analysis a corrective influence," he said.
Elwood Oakley said another 'corrective influence' can be found in a provision of the corporate fraud law just passed by Congress and signed by President Bush. The provision actively encourages employees at all levels to report wrongdoings, and protects them from any retaliation they might encounter from doing so.
"I think from an ethics process, these new whistle blower protection laws might have more benefit than anything that's been put on the books. For example, the WorldCom fraud had to have been known by 15, 20, 40 people within the accounting department, yet no one came forward to report that wrongdoing," Mr. Oakley said.
Mr. Oakley said this new encouragement to report wrongdoing coupled with protection for doing so should create a new safeguard.