Business Ethics: Actions lagging behind proclamations

While more organizations are voicing a committment to ethical standards, their proclamations do not appear to be matched by their actions-an alarming disconnect that is emerging as financial professionals are facing more pressure to act unethically. The continuing down economy may have something to do with the divide. Challenging competetive and economic conditions have meant that executives are often focusing on more immediate concerns such as cost-cutting. A survey conducted by the AICPA and Chartered Institute of Management Accountants revealed that about 10% to 15% more organizations are providing statements of ethical values and a code of ethics as well as related training, hotlines and incentives such as performance based rewards. However, corporate leadership seems to be less engaged. There was a reported decline in the number of corporate leaders who held formal responsibility for ethics. Respondents to the survey said they felt more pressure to act unethically during an economic downturn. Of the respondents who reported ethical misconduct, only half were satisfied with how their ethical concerns were handled. Among those who did not report misconduct, the main reason was the perception that reporting the misconduct would not make a difference. Clearly, their needs to be an attitudinal adjustment with those held responsible for reporting unethical behavior.