CEO

A Chief Ethics Officer??

Business EthicsTeam 4

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Agenda

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• Who is a Chief Ethics Officer?

•Case summary

•Case questions

Who is a CEO?

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• ‘’ deals with fostering and maintaining integrity & ethical behavior,

•handles complaints about business practices

•responsible for regulatory & compliance work in the organisation’’

•Responsibilities:

•Ethics and Compliance Association http://www.theecoa.org/Whatis.asp

Who is a CEO?

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•Annual losses $ 400 billion: Arthur Anderson Survey, 1999

• Between 31% and 52% U.S. workers have witnessed co-workers operating unethically • ECOA :16 founding members in 1992, to 1,250 today

•Total compensation for Top Global Ethics and Compliance Executives approaching $750,000: 2005 EOA Survey

•Real life examples; HP, Dell, Nortel Networks, Novartis, Deloitte,

Case Summary

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• Financial scandals created new full time senior management position

• In Canada corporate secretary or compliance-tasked vice president perform similar job

• CEO at MCI (WorldCom’s post-bankruptcy incarnation)

Chief executive: ensure no unethical behavior taking place

CEO: prepare infrastructure people can raise concerns

• CEO at Dell

Responsible for promote an individual accountability for ethics

Case Questions

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The CEO is just the latest fad in corporate governance as a response to recent corporate scandals.

• Not a fad.

•Ethics themselves should be addressed;appointing the CEO is not the solution in itself

•Organisations that already have a strong ethical culture may not choose to appoint a CEO.

•To what extent can ethical standards be imposed top down?

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Case Questions

•Ethical standards CAN NOT BE IMPOSED•There must be fit.•Ethical conditions can be “set” from top management to operational level through …

•Self example•Clear & continuous message from top management•Ethical training•Written policies – easy to understand•Involvement of all employees – team consultant•Business decisions that provide ethical examples espoused and encouraged

Case Questions

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What are the arguments pro and con firms appointing ‘CEO’?

Pros

• Shows dedication of business to the issue of ethics

• Portrays a good public image of the company

• Allows for increased dialogue for potential whistleblowers

Cons

• Negative portrayal of CEO of company

• Negative portrayal of company

Case Questions

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Would appointing one reduce the level of unethical behavior of firms?

•Yes it would, keeping in mind the approach adopted

• Authoritative or viewed as a mentor or facilitator;

•Assumption

• 80-90% can be controlled; Bagel man; opportunity??

• Extreme cases not affected

• Resistance to change on part of employees

Alternatively…

>>>What if the CEO is not ethical…??

CEO? CEO?

Want a piece of

me huh??

How was I supposed to know?