Corporate Integrity & Accountability
Publication Year: 2004
Subject: Business Ethics (general)
The ethical and legal scandals at Enron, WorldCom, Tyco and many other businesses in the United States, Europe and Asia have shaken people’s confidence in business. Corporate Integrity and Accountability seeks to address questions of corporate integrity as they arise for financial reporting, executive compensation, globalization, and business ethics itself. The chapters are the product of leading business ethicists—both academic and practitioner—in the U.S. and Europe, resulting in the application of different methodologies, sources, and forms of argument. This gives the reader a sense not only of the complexity of some of the ethical issues business faces, but also the richness of the various resources that are available to address these issues.
- Front Matter
- Back Matter
- Subject Index
- Chapter 2: Wittgenstein's Bedrock: What Business Ethicists Do
- Chapter 3: Tylenol Revisited: Friedman and the Current CSR Debate
- Chapter 4: The Practicality of Pluralism: Redrawing the Simple Picture of Bipolarism and Compliance in Business Ethics
- Chapter 5: Integrity in the Private, the Public, and the Corporate Domain
- Chapter 6: Why Conflicts of Interest and Abuse of Information Asymmetry are Keys to Lack of Integrity and What Should Be Done about it
- Chapter 7: An Ethical Framework for Auditor Independence
- Chapter 8: The Ethics of Financial Reporting, the Global Reporting Initiative, and the Balanced Concept of the Firm
- Chapter 9: What is a Successful Company? A Path to Understanding Accountability
- Chapter 10: Small Firm Accountability and Integrity
- Chapter 11: The U.S. Business Scandals: Perspectives on Ethics and Cultures at Home and Abroad
- Chapter 12: Is Corruption Always Corrupt?
- Chapter 13: Law, Accountability, and Globalization
- Chapter 14: The Next Generation of Codes of Conduct
- Chapter 15: Global Business Ethics and Sustainability: A Multi-Institutional Approach
- Chapter 16: Principles with Process: Corporate Integrity within a Corporate Citizenship Framework
- Chapter 17: CEO Compensation: Parameters, Paradigms, and Paradoxes
- Chapter 18: Responsible Shareholding and Investor Engagement in the U.K.
- Chapter 19: Instilling Moral Competence in a Multinational: A Technical Issue
Copyright © 2004 by Sage Publications, Inc.
All rights reserved. No part of this book may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the publisher.
Sage Publications, Inc.
2455 Teller Road
Thousand Oaks, California 91320
Sage Publications Ltd.
1 Oliver's Yard
55 City Road
London EC1Y 1SP
Sage Publications India Pvt. Ltd.
B-42 Panchsheel Enclave
Post Box 4109
New Delhi 110 017 India
Printed in the United States of America
Library of Congress Cataloging-in-Publication Data
Corporate integrity and accountability / George G. Brenkert [editor].
Includes bibliographical references and index.
ISBN 0-7619-2954-1 (cloth) — ISBN 0-7619-2955-X (pbk.)
1. Social responsibility of business. 2. Corporations—Moral and ethical aspects. 3. Corporations—Corrupt practices. 4. Business ethics. I. Brenkert, George G. HD60.C638 2004
This book is printed on acid-free paper.
04 05 06 07 10 9 8 7 6 5 4 3 2 1
Acquisitions Editor: Al Bruckner
Editorial Assistant: Mary Ann Vail
Production Editor: Diane S. Foster
Copy Editor: Publishing Servies
Typesetter: C&M Digitals (P) Ltd.
Proofreader: Libby Larson
Indexer: Molly Hall
Cover Designer: Janet Foulger
The essays presented in this book arose out of a twofold intention. First, the analysis of corporate integrity and accountability has acquired significant urgency and importance due to recent business scandals in the United States and other parts of the world, as well as the effects of globalization over the past several decades. The chapters in this book seek to contribute to the examination of these complex problems. Second, inasmuch as these issues have an international dimension, the reflections of individuals drawn from both sides of the Atlantic may contribute more meaningfully to this discussion than would those drawn from just one society. The authors of the chapters in this book reflect this intention as well. In addition, though they come primarily from universities, one-third of the papers are from those in business or nongovernmental organizations. In short, the chapters in this book were intended to advance the global discussion of corporate integrity and accountability and to do so through the trans-Atlantic perspectives of its authors.
All the chapters in this book were originally presented at the Trans-Atlantic Business Ethics Conference at Georgetown University in the fall of 2002. This was the second such conference, the first one having been held in the fall of 2000 in Budapest, Hungary, at the Budapest University of Economic Sciences. In developing the Georgetown conference, I had the important advice of Professor Laszlo Zsolnai, from the Budapest University of Economic Sciences, who was, unfortunately, unable to attend.
We were very pleased to have the financial support of both Levi Strauss & Co. and ING Group (the Netherlands). Without their financial support this conference would not have been possible. The Georgetown Business Ethics Institute as well as the McDonough School of Business (Georgetown University) also provided financial support. For the support and participation of all these individuals and organizations, I am very grateful.—George G.Brenkert[Page viii]
About the Editor[Page 283]
George G. Brenkert is Professor of Business Ethics and Director of the Georgetown Business Ethics Institute. He is current Editor-in-Chief of Business Ethics Quarterly, the journal of the Society for Business Ethics, of which he is also a past president. He is a member of the Executive Committees of the Society for Business Ethics and the Association for Practical and Professional Ethics, and a Fellow of the Ethics Resource Center. He serves on the Editorial Boards of Business Ethics: A European Review and of Business and Society Review. He received his doctorate from the University of Michigan.[Page 284]
About the Contributors[Page 285]
Ronald E. Berenbeim is a Principal Researcher and Director of the Conference Board's Working Group on Global Business Ethics Principles. Formerly a director of Guaranty National Corp., Mr. Berenbeim served on the National Association of Corporate Directors’ Blue Ribbon Commission on the Professional Board.
Norman E. Bowie is the Elmer L. Andersen Chair in Corporate Responsibility at the University of Minnesota, where he holds a joint appointment in the Departments of Management and Philosophy. He has been a fellow at Harvard's Program for Ethics and the Professions and has served as Dixons Professor of Business Ethics and Social Responsibility at the London Business School.
Jane Collier is Senior Research Associate at the Judge Institute of Management at the University of Cambridge in Management Studies. She is Fellow and Director of Studies in Economics and Management Studies at Lucy Cavendish College.
David Collins is a former member of the executive committee of Johnson & Johnson with responsibility for a number of operations, including McNeil Consumer Products, the makers of Tylenol. He is also the former president of HealthCare Products, a consumer products division of Schering-Plough.
Richard De George is University Distinguished Professor of Philosophy and Business Administration and Director of the International Center for Ethics in Business at the University of Kansas. He is a past president of the American Philosophical Association; of the International Society of Business, Economics, and Ethics; and of the Society for Business Ethics.
John W. Dienhart is the Boeing Frank Shrontz Chair for Business Ethics at Seattle University. He is also the director of the Northwest Ethics Network, an independent group whose membership includes businesses, nonprofits, and government agencies.
Thomas Donaldson is the Mark O. Winkelman Professor of Legal Studies at the Wharton School of Business, University of Pennsylvania. He is a Trustee of the Carnegie Council on Ethics and International Affairs, a past president of the Society for Business Ethics, and an associate editor of the Academy of Management Review.
Thomas W. Dunfee is Kolodny Professor of Social Responsibility in Business at the Wharton School of Business, University of Pennsylvania. He was Vice Dean in charge of Wharton's Undergraduate Division, 2000–2003. He is past president of the Academy of Legal Studies in Business, a former editor-in-chief of the American Business Law Journal, and a past president of the Society for Business Ethics.
Georges Enderle is the Arthur and Mary O'Neil Professor of International Business Ethics at the Mendoza College of Business, University of Notre Dame. He is President of the International
Society of Business Economics and Ethics (2001–2004) and one of the cofounders of the European Business Ethics Network.
Alan S. Glazer is the Henry P. and Mary B. Stager Professor of Business at Franklin & Marshall College, Lancaster, PA. He was the Associate Director of the Independence Standards Board's Conceptual Framework Project. He serves on the editorial board of the Journal of Accountancy and is a CPA in Pennsylvania.
Henry R. Jaenicke is the C. D. Clarkson Emeritus Professor of Accounting at Drexel University. He was the Director of the Conceptual Framework Project of the Independence Standards Board.
Pieter Kroon was Head of Public Affairs of ING Group until 2003. In this function, Mr. Kroon was responsible for government and society relations, sustainability issues, and corporate values. He was also a member of various working groups within the industry dealing with sustainability issues, including the Netherlands Bankers’ Association (NVB), the Dutch Association of Insurers (VvV), the International Chamber of Commerce (ICC), and World Business Council for Sustainable Development (WBCSD).
Josep M. Lozano is Professor and Director of the Department of Social Sciences at the ESADE Business School in Barcelona, Spain. He is also Director of the Institute for Individual, Corporations and Society (IPES) at ESADE. He is the ESADE representative in the European Academy of Business in Society, which was cofounded by ESADE.
Henk van Luijk is Professor Emeritus at the Universiteit Nyenrode, The Netherlands Business School. He is the former director of the European Institute of Business Ethics at Nyenrode University and the former chairman of the European Business Ethics Network. He is a member of the board of the International Society of Business, Economics, and Ethics and of the Knowledge and Information Centre for Corporate Social Responsibility of the Dutch Ministry of Economic Affairs.
Susan McGrath, CPA, is a Managing Director at VERIS Consulting, a firm providing due diligence, internal audit outsourcing, litigation support, and other specialized accounting and auditing services with a focus on the insurance industry. She is a former director on the staff of the Independence Standards Board and has written on auditor independence issues for professional journals.
Bruce Moats is the Corporate Vice President of Worldwide Government Affairs & Public Policy for Levi Strauss & Co. (LS&CO.). An advisor to the CEO of LS&CO., Mr. Moats is a member of the LS&CO. Executive Committee on sourcing. He was named by the UN/ILO to represent over 3,000 U.S. businesses in the May 2001 tripartite meeting of experts on HIV/AIDS.
Eleanor R. E. O'Higgins is on the faculty of the Smurfit Business School at University College Dublin. She is on the editorial board of Business Ethics: A European Review and is currently Director of the International Theme Committee of the Academy of Management.
Steven A. Rochlin is Director of Research and Policy Development at the Boston College Center for Corporate Community Relations. He is the principal investigator for a global business survey project called “The State of Corporate Citizenship” and co–project director of a project called “Integrating Corporate Citizenship Across the Business.”
Arthur Siegel is currently a consultant and corporate director. Previously, he was executive director of the Independence Standards Board and before that a partner in Price Waterhouse, where he was vice chairman of the firm in charge of its audit practice. He has served as chairman of the American Institute of CPA's SEC Practice Section executive committee and on the Emerging Issues Task Force and the Financial Accounting Standards Advisory Council of the Financial Accounting Standards Board.
Catherine Smith is Chief Operating Officer for ING U.S. Financial Services, heading all
customer service operations and IT for the U.S. business lines. During 2001, Ms. Smith was President of Health, Education, and Government Distribution for ING Aetna Financial Services. Prior to 2001, she was Chief Financial Officer for Aetna Financial Services.
Laura J. Spence is Senior Lecturer at Brunel University, London, U.K. She is Coordinator of Brunel Research in Enterprise, Sustainability, and Ethics. Since 1998 she has served on the executive committee of the European Business Ethics Network.
Manuel Velasquez is the Charles J. Dirksen Professor of Business Ethics at the University of Santa Clara, where he holds appointments in the Department of Management and the Department of Philosophy. He is a past president of the Society for Business Ethics and current Chair of the Department of Management.
Frank Vogl is President of Vogl Communications, Inc., a strategic management consulting firm in Washington, DC. He is a cofounder, former Vice Chairman, and Advisory Council member of Transparency International; a member of the Board of Directors of the Ethics Resource Center and a founding fellow of the ERC's Fellows Program; and a Trustee of the Committee for Economic Development.
Johan Wempe is Partner of KPMG, Director of KPMG Sustainability, and Professor in Corporate Social Responsibility & Sustainability at the Rotterdam School of Management of the Erasmus University in Rotterdam. He is a member of the Standing Committee on Corruption and Extortion of the ICC.