Corporation Rules

¶ … flurry of ethical fiascos at companies like Enron, Tyco, Peregrine, Adelphia and WorldCom have spurred many corporations to take a close look at the rules that govern their corporate behavior. Enron, likely the most famous of these cases, involved accounting and other forms of fraud at many levels of the company, including the executive level. Clearly, the actions of these corporations represent a failure in the moral and ethical actions of a number of players.

In response, there have been a number of calls aimed at tightening ethical considerations within corporations, including restructuring rules within corporations. Restructuring a corporation's rules of conduct has a number of moral considerations. Importantly, it can be argued that the basic, underlying motivation of a corporation is essentially at odds with many other ethical notions held by society. At its most basic, a corporation's goal is to make money.

Hessun Wee, columnist with Business Week Online, notes the pressure of a capitalistic, "Wild West culture that sublimate(s) everything to the goal of driving up the stock price" (Wee). It is this pressure to make money and drive up stock price that essentially may have driven corporations like Enron and WorldCom to commit many acts considered unethical by society.

However, it can be argued that the capitalistic need to make money is fundamentally at odds with other ethical considerations that are often placed on the table when restructuring a corporation's rules of conduct. Corporations are often asked to be good corporate citizens, and ensure the well-being of their employees, the environment, and even society as a whole. This is all well and good, and certainly ethically defensible, but a problem arises when a corporation's fundamental role of making money comes into direct conflict with these goals.

What happens to the viability of corporate ethical codes when a company must choose between making a profit or polluting the environment by dumping waste into a local river (and thus saving money)? More importantly, what happens to corporate ethics when a corporation must either commit an unethical act (like polluting the environment, harming human health, or falsifying accounting records) or go out of business, thereby damaging shareholders, employees, as well as executives.

These examples are simply extreme examples of the inherent conflict that exists between the corporate need to make money and societal well being. This conflict always exists, and in order for a corporation to create a meaningful code of conduct, the corporation must both acknowledge this conflict, and work it into their ethical code and corporate culture. One problem with changing corporate rules is that words on paper alone cannot guarantee that a corporation will behave in an ethical manner.

Enron had a set of corporate guidelines governing corporate behavior, and yet it chose to willingly disregard these guidelines. In fact, Enron's board of directors voted to waive important provisions in its corporate code of conduct. The problem lies with executives who do not believe in this code of conduct, and act in defiance of such a code. Writes Shaletta Espie of the Ethics Resource Center, "To be effective, codes of conduct need to be actual living documents not just framed pieces of paper hanging on company walls.

Such codes must be encouraged and valued at the highest levels." As such, a code of conduct in an organization can only be effective it is integrated through policies, training, and implementation at all levels of the organization (Espie). In general, I agree with attempts to restructure a corporation's.