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Tastes Great - Less Filling?
By Lauren | February 6, 2008
Recent discussions about the actions of a rogue trader at French bank Société Générale have initiated a predictable clash of opinions between two factions in the business ethics community. Some ethics gurus, like French Finance Minister Christine Lagarde, argue that stronger internal controls are needed to prevent bad employees from bringing businesses to financial harm. Others, among them noted ethicist Rushworth Kidder, argue that what’s needed to prevent such debacles in the future is a greater emphasis on ethics in the workplace. Train your employees to take the high road, they argue, and don’t rely on financial systems to make your employees do the right thing.
Maybe it was all those commercials during the Super Bowl, but the two competing arguments keep reminding me of the slogan of one popular light beer. I’m also reminded of the ads for some of those “only available on TV” products. “Is it a flyswatter? Is it a saute pan? You’re both right!”
You get the idea.
Bottom line, internal controls and ethical culture aren’t “either-or” … they’re “yes-and”. Companies need to foster strong ethics among their employees to prevent the ignorant or weak-willed from succumbing to ethical lapses. They also need reliable internal controls to prevent their dishonest or excessively clever employees from intentionally going too far (and to catch them quickly if they do). An ethical corporate culture and strong financial controls reinforce and support each other. Without either one, the other is bound to be less effective.
Topics: Business Ethics, Corporate Governance, Risk Management |
February 6th, 2008 at 12:57 am
I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.
Susan Kishner