Dear Ethix – Issue 25

More On Corporate Culture

Corporate culture is important because it sets the ethical tone of the practices of the business. The most important traits of a healthy organizational culture in my view are that people at all times work together, cooperatively, honestly, and openly with each other and their customers.
Stephen R. Sprague
Bloomington Springs TN

I recently received a copy of Ethix, which is new to me, and for which I commend you. In Issue 23, where you have your “Eight Traits of a Healthy Organizational Culture” you invited comment. First of all, let me say that I think the 8 traits are excellent, and I like the juxtaposition of the positive trait and the consequences of the absence of these traits.

I would add one thing, which I think is missing. That is a commitment to the external community. In our work in the field of anticorruption and corporate social responsibility (CSR) in Central and Eastern Europe, we have come to the conclusion that a company that does not create and deploy a vigorous CSR is not yet a fully healthy company. It is an issue of responsible service and stewardship of gifts entrusted, whether as individuals or corporations. The company as a source of shalom to its stakeholders.

CSR has obvious bottom line impact, but also creates space for a meaningful double bottom line as well, which is important in retaining the trust of the community, the commitment of the workforce and the sense of meaning in the whole endeavor.

Allan Bussard, Managing Director
The Integra Venture, Slovakia

Four Cheers for Ethix

We are seeing a remarkable number of corporate ethics violations. I hope that you see this as an endorsement of the need for the Institute for Business, Technology and Ethics. Many companies (including mine) are redefining or recommitting to their value statements. Employees (and now Wall Street) care a great deal about this subject.

Jim Robertson
Human Resources Director, Round Table Pizza
Walnut Creek CA

I was reviewing our files and found a copy of your Ethix Bulletin. I then checked out your web site. Thank you for creating such a remarkable and insightful venue to discuss a subject currently lacking in our culture.
Geralynn Krajeck
Executive Education, UCLA

Ethix magazine is very enlightening to students of law and those with a background in life sciences.
Ashish Gosain
Delhi, India

Valentine Interview

I was intrigued by your interview with Don Valentine in the latest Ethix. I couldn’t figure out if his answers to some of your hard questions (and even some of the easier ones!) made sense. For example, when David asked him for his thoughts on the responsibilities of corporate boards, Valentine evaded the question by saying he wasn’t involved in complex situations like Enron’s. And when asked about declining investment opportunities for ethical reasons, I think the response “we try not to finance anyone who has bad references” is also sidestepping the question. But maybe I am being naïve.

Anyway, I appreciate that you are asking the questions. I hope that the current messes with Enron and others are making folks more interested in addressing ethical issues.
Gary Nielsen
Columbus, OH

More Than An American Problem

Financial markets are nervous for three main reasons: the quantity and magnitude of accounting and corporate governance scandals, the timing of economic recovery, and continuing uncertainties about terrorism. Only the very foolish would pretend that recent events in America could not or will not happen in Europe. The issues raised by Enron, WorldCom, Xerox, and others are issues for us all.

A first lesson we can learn was summed up by the Financial Times some days ago: “Accounting is now used for something else than its traditional purpose. In the past, it was a tool for the board to assess the performance of managers, and for investors to assess the value of the company compared with its peers. Instead it has become a means for managers to deliver a steady flow of announcements … that will push up — or at least prop up — the share price.”

A second lesson is that any company payment system that over-rewards managers on the basis of share price performance risks creating perverse incentives.
Frits Bolkenstein
Dutch member of the European Commission,

The International Herald Tribune (July 18, 2002)